Zoopla House Price Index: Spike in 5% property discounts

The latest Zoopla House Price Index shows that a large proportion of sellers are accepting 5% property discounts.

Some 42% of sellers are now accepting offers over 5% below the asking price – the highest number in five years, Zoopla’s house price index research shows.

The average discount has hit 3.8%, though 15% are accepting offers 10% lower than asking.

House prices are up 1.2% in a year, but annual house prices are expected to turn negative in the second half of the year – with a 5% fall by the end of 2023.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said:

“We could be piling properties high and selling them cheap in the second half of the year, as mortgage misery throws houses into the bargain bucket.

“A huge number of today’s buyers will have locked in a mortgage before rates started to rise through the roof. As a result, sales held up at 8% above the five-year average.

“However, demand is already down 14% in a year, and as the impact of mortgage rate hikes feeds though into sales, we can expect this to intensify. A rise from 4% to 6% cuts buying power by 20%, which is going to take a toll.

“It’s also worth keeping a close eye on the number of properties being put up for sale. Supply is starting to grow faster, and 18% more homes hit the market in the previous four weeks than the five-year average.

“As borrowers face the horror of remortgaging at a much higher rate, they’re weighing up their options.

“The government is hoping to stem a flood of forced sales by making it easier for people to make short-term mortgage changes in order to bring monthly costs down.

“It remains to be seen whether this is enough, or whether higher rates for longer are enough to persuade people they need to downsize.

“More forced sales could make Zoopla’s prediction of a 5% price fall start to look fairly optimistic.”

Kindly shared by Property Wire

Main article photo courtesy of Pixabay