‘Growing buyer confidence’ in housing market as sale discounts get smaller
Housing market activity, including sales and the supply of properties for buyers to choose from, has improved, Zoopla said.
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Your support makes all the difference.House sellers are typically shaving £10,000 off their original asking price to achieve a sale, according to a property website.
Across the UK, the average discount of 3.9% recorded in March is a “marked improvement” compared with an average discount of £14,250 or 4.5% recorded in November 2023, Zoopla said.
Its report said the narrowing “reflects a combination of greater realism from sellers on their asking price and growing buyer confidence”.
Discounts typically remain bigger in London and the South East, where there is an average discount to the asking price of 4.3% or £19,500, Zoopla said.
The average discount was calculated based on all house sales recorded by Zoopla, including those where there was no discount.
Sellers need to remain realistic on where they set the asking price
The website said that housing market activity, including sales and the supply of properties for buyers to choose from, has improved in the first quarter of this year.
Zoopla said around 7% more home sales have been agreed over the first quarter of 2024 compared with the same period last year.
Yorkshire and the Humber and the North West of England have been seeing particularly strong growth in sales while the South West and the North East of England have seen relatively strong growth in new sellers coming to market, the website said.
It predicted that the greater availability of homes for sale will keep price rises in check. The average estate agent had nearly 30 homes for sale in the first quarter of this year, which is in line with the pre-coronavirus pandemic average, Zoopla said.
This means buyers have more choice and room to negotiate, the website added.
The timing and scale of expected Bank of England interest rate reductions as the year goes on have the potential to boost market sentiment and reduce mortgage rates, Zoopla said.
Expectations of lower interest rates are already priced into the fixed-rate mortgages on offer, and lower interest rates would likely result in further modest declines in mortgage rates, the website added.
Richard Donnell, executive director at Zoopla, said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.
Demand in the UK housing market has improved but hasn’t come off the leash yet
“House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale.
“We don’t believe that house prices are about to increase more quickly but there is more buyer interest. Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”
Marc von Grundherr, director of estate agent Benham and Reeves, said: “Previously, the ability to find a buyer in a proceedable position was a challenge in itself and so there’s no doubt that market conditions have improved in this respect.
“Price remains the key compromise for sellers when it comes to securing a buyer in today’s market, with higher mortgage rates continuing to restrict buyer purchasing power. However, the gap between this purchasing power price point and seller asking price expectation has narrowed and we’re finding that sellers are more than happy to oblige in order to make their move.”
Tom Bill, head of UK residential research at Knight Frank, said: “Demand in the UK housing market has improved but hasn’t come off the leash yet…
“As supply grows, downwards pressure on prices will increase and a wave of people rolling off sub-2% two-year mortgages from early 2022 will add to the financial pressures in the system.”
Matt Thompson, head of sales at London-based estate agent Chestertons, said: “March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”