Sellers are taking a smaller discount to secure a sale as more properties hit the market and mortgage rates increases hit pause, according to Zoopla.
Buyers are securing an average £10,000 (3.9%) discount to the asking price to make a deal in the first three months of the year, which is far less than the £14,250 average discount (4.5%) seen in November 2023. This is lowest level since July 2003, the figures from Zoopla’s monthly House Price Index show.
Discounts remain larger in London and the South East, where there is an average discount to asking price of 4.3% or £19,500.
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“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,” Richard Donnell, executive director at Zoopla, said.
New sales agreed are 9% higher than a year ago, a trend that is encouraging more sellers to list their homes for sale with 20% more homes for sale compared to this time last year.
The property market has received a boost, with mortgage rates now at 4.4% for a 75% loan to value 5-year fix rate loan, down by over 1% from a high of 5.8% in June 2023. After years of ultra-low rates, 4% can still be considered high but far from the average two-year deal of 6.66% recorded during Liz Truss’ mini-budget.
“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. House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale,” Donnell added.
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The strongest growth in sales activity continues to be in areas with more affordable house prices such as Yorkshire and The Humber (11%) where the average house price is £185,600 and the North West (13%) with an average house price of £194,500. The strongest growth in new sellers listing homes is in the South West (28%) and North East (26%).
The average estate agent had almost 30 homes for sale in the first three months of 2024, a return to the pre-pandemic average. This means buyers have more choice and room to negotiate, especially where homes are failing to attract buyer interest.
“While we’re yet to see interest rates fall there’s no doubt that the certainty brought about by a continued freeze has helped to improve market sentiment considerably. Despite the disappointment of the Spring Budget, buyer confidence is building and there remains a strong appetite to transact in 2024,” Marc von Grundherr, director of Benham and Reeves, said.
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