Zooplaís latest findings show that a third of all sellers have reduced the asking price of their house since placing it on the market in the latest indication that vendors are being forced to be more modest in their expectations from a cooling housing market.
Such high levels of discounting have not been seen since August 2012, and the figure has risen by 6% from 27% in February of this year.
£3.8bn is the amount calculated by Zoopla as the gross sum of all the price reductions on British properties, with the average home now having 6.7% of its original market value chopped off compared with 6.3% in February 2014 ñ equating to roughly £3600 on average per house.
The data is the latest indicator that the effect of constraints on mortgage lending and the uncertainty over an interest rate hike, especially with a general election round the corner, is freezing the market.
With mortgage approvals tumbling month-month, the record low mortgage rates high street lenders are not having the desired pulling effect on a British public unified in their belief that the housing market has been overpriced for too long now.
That the area with the greatest average fall in house prices is Mitcham in south-west London itself speaks volumes of the united front consumers are pulling in this area, disillusioned with seemingly unending increases in housing costs over the first half of this year, official figures suggest many have migrated to Londonís surrounding regions to escape the financial pressures inherently attached to residing in the vicinity of the centre of the Capital.
Though only 29% of houses have undergone price reductions in London, this figure has almost doubled since the early part of this year, further underlining the price freeze endured by the Capital over the course of 2014.
Preston, in the north-west county of Lancashire, is the city offering consumers the best bang for their buck with 44% of properties having decreased in selling value since being put on the market. It is followed by other Northern towns namely Barnsley, Wakefield and Rotherham which all see average price reductions of in between 7.4% and 8%.
Lawrence Hall, analyst at Zoopla, expressed that although sellers have moderated their stance towards costly housing transactions, this could not last long with an influx of buyers expected in January.
He said: “The property market typically slows in December as buyers postpone their plans until the New Year and become pre-occupied with the festive season, but these figures suggest that sellers may be being forced to rest their expectations and become more realistic in order to secure a buyer. People are well attuned to a bargain at this time of year, so homebuyers may want to capitalise on the latest raft of reductions.”
Hall added: “The recent Stamp Duty reforms have injected a real feel-good factor into the property market that is likely to last into January when there will be a renewed surge in buyers looking for property. There would usually be an air of uncertainty in the lead up to an election, but the positivity created by the tax overhaul should ensure this isnít as keenly felt as usual.”
However, Hallís optimism is counterbalanced by the more doubtful approach of Jonathan Harris, of Anderson Harris, regarding the lasting effects of Osborneís stamp duty reforms. He said: “The Stamp Duty reforms are likely to provide a boost in the short term to the lower end of the market but the mortgage market review reforms have made it harder for many people to get a mortgage.”
“All we need now is for lenders to come up with innovative products that will solve some of the issues created by MMR. In particular, something directed at older borrowers who are struggling to get a mortgage, remortgage or even guarantee a child’s mortgage because of their age.”
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