1st
Dec 2023
Over the last twelve months house prices have dropped by1.2 per cent, according to Zoopla’s recently released report which states the average discount on homes is at its highest for some time.
The average discount for a sale has now topped £18,000 or 5.5 per cent which is the highest differential since 2018.
The report also highlights a six year high for numbers of properties out on the market which is 34 per cent higher than a year ago. The average for an estate agency branch of homes for sale is 31, whereas in the mid pandemic boom it was 14.
A head of personal finance of a financial services company, says: “Black Friday has hit the property market, which means a bleak time for sellers. They’re having to slash 5.5 per cent off asking prices to secure a sale, providing the biggest discounts for five years. This doesn’t bode well for the future of property prices.
“The root of the problem is a lack of buyers, because higher mortgage rates are pushing potential properties out of reach. Demand is down 13 per cent from this point in 2019. At the same time, we’ve seen a rebound in the number of properties for sale – up a third in a year – so any potential buyers have plenty to choose from.
“It means sellers are having to pull out all the stops to shift their homes – including cutting the price. So far, this is ensuring that sensibly-priced properties are finally shifting, with sales up 15 per cent in a year. However, it’s worth bearing in mind the mini-Budget had unleashed carnage in the mortgage markets 12 months ago, so any comparison was bound to look fairly flattering.”
There is the warning that the current state of the market will persuade many intended sellers to hold back from putting their property up for sale.
The Office for Budget Responsibility believes that current state of sales will start to continually fall and by next year will plummet down to 6.9 per cent.
The personal finance services head adds: “This will take a toll on house prices. The OBR expects them to fall 4.7 per cent in 2024 – taking the peak-to-trough drop to 7.6 per cent. Even then it doesn’t think we’ll bounce back in a hurry, and will take until the second half of 2027 to get back to their 2022 peak.”
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