In recent news, it has been reported that the UK property market is currently experiencing a buyer’s market, with an average £18,000 being knocked off property asking prices according to Zoopla. This significant discount marks a five-year high, despite the ongoing long-term shortage of homes for sale. Let’s delve into the details and understand the implications of this trend.
The Strength of Homebuyers in the Market
Recent research conducted by Zoopla reveals that homebuyers currently hold a strong negotiating position, with sellers being more open to accepting lower prices. The average discount on house purchases has reached its highest level since 2018, indicating a favorable environment for buyers. Despite the long-term shortage of homes in the UK, it remains a buyer’s market.
Zoopla’s research indicates that the average discount to asking price for completed sales grew to 5.5% in the first half of November, up from 3.4% across the first half of 2023. In London and the south-east of England, the discount was even greater, at 6.1%, equivalent to £25,000. These figures highlight the extent to which buyers are able to secure favorable deals in these regions.
Factors Influencing the Property Market
The UK property market has experienced significant fluctuations since the controversial “mini-budget” introduced by Kwasi Kwarteng, which led to the departure of the former prime minister, Liz Truss. This event caused mortgage costs to soar initially, but the Bank of England’s decision to keep interest rates on hold at 5.25% indicates that the series of hikes may have concluded. As a result, some mortgage deals have fallen back below 5%.
Despite the potential easing of mortgage rates, sellers are still facing pressure to accept lower prices. Zoopla suggests that current conditions are the most favorable for buyers since 2018, when the market was affected by Brexit uncertainty. However, it should be noted that financing costs were lower during that period.
Realism Among Sellers and Increased Transactions
Zoopla’s findings also indicate that sellers are now displaying a greater sense of realism regarding the prices they are willing to accept. This shift in attitude has resulted in a 15% increase in the number of transactions compared to the previous year. Additionally, the number of homes available for sale is at a six-year high, with a strong supply of three- and four-bedroom family properties.
While the current conditions in the UK property market favor buyers, it is important to note that buyer demand remains 13% lower than it was in 2019, prior to the COVID-19 pandemic. The pandemic caused a boom in the property market, and the current levels of demand reflect a decrease from that peak.
The market offers favorable conditions for buyers, with an average discount of £18,000 on property asking prices. Despite the ongoing shortage of homes, sellers are now more realistic and willing to accept lower prices. However, it is essential to recognize that buyer demand remains lower compared to pre-pandemic levels. It will be interesting to observe how this buyer’s market evolves in the coming months and its implications for the overall property market.
If you are a potential buyer searching for a great deal in this buyer’s market, we encourage you to consider contacting Caia Homes. With our expertise and knowledge of the current market conditions, they can assist you in finding the perfect property at a favorable price. Don’t miss out on this opportunity!