Home buyers currently enjoying an average saving of £18,000

Home buyers are currently enjoying an average saving of £18,000 on their next home, according to a recent House Price Index[1]. This figure, which is helping to seal many a property deal, points towards a strengthening buyers’ market. With mortgage rates climbing, demand has been impacted. However, increased available properties have resulted in more choice and room for negotiation. The discount on asking prices for successfully completed sales has reached a five-year high. Specifically, the first half of last November saw a 5.5% discount compared to an average of 3.4% during the same period in 2023.

SOUTH OF ENGLAND FEELS THE IMPACT

This trend is particularly pronounced in the south of England. In London and the South East, the average discount on asking prices is an impressive 6.1%. To put it into perspective, that’s £25,000 sliced off the initial asking price.

Despite a 13% drop in buyer demand compared to 2019, new sales are still being agreed. The total volume is now 15% higher than this time last year and even 5% up on 2019 levels.

SELLERS ADJUSTING TO THE MARKET

This suggests that sellers are adjusting to the market realities, and potential movers are banking on the possibility that mortgage rates may have peaked. They could start to fall later in 2024.

Sales are also holding steady in many parts of Scotland and inner London, where the market has been somewhat sluggish compared to the rest of the UK in recent years.

RECORD SUPPLY OF HOMES ON THE MARKET

In a welcome development for prospective buyers, the number of homes up for sale reached a six-year high. There are now 34% more homes on the market than a year ago.

MORE CHOICE, MORE NEGOTIATION

This means that the average estate agency branch now boasts over 31 homes for sale, a significant increase from the pandemic-induced low of just 14. Consequently, the boosted supply gives buyers more choice but is likely to keep prices under downward pressure as price-sensitive buyers negotiate.

London house prices, while high in absolute terms, have lagged behind the rest of the UK over the last six years. The average value of a London home is only 8% higher than seven years ago, compared to a 28% increase across the rest of the UK.

THE FUTURE LOOKS BRIGHT

New sales are still being agreed at a faster rate than a year ago and pre-pandemic. This indicates that house prices do not need to post larger falls to get people moving, but sellers should brace themselves for more price negotiations.

Don’t forget, our professional friendly advisors are on hand to support you and can help you explore all of your options.

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