Discounts on asking prices increase – leading to more sales

Buyers appear to be negotiating harder as the gap between average asking and achieved prices increased during the first quarter of this year.

Both Zoopla and the NAEA say that discounts on asking prices are becoming more common.

NAEA Propertymark also says that the number of sales agreed per branch has hit a six-month high.

Zoopla analysis of housing markets in the UK’s largest 20 cities shows the gap between average asking prices to average achieved prices increased from 3.3% at the end of 2018 to 3.9% over the first three months of this year.

The gap increased in most regions, with the largest discount in Aberdeen at 8%, followed by London at 5.7%.

Glasgow and Edinburgh were the only UK cities where properties sold at a premium, at 5.2% and 6.3% above asking price respectively.

House price growth among the 20 cities was up 1.7% annually during April, Zoopla said, with the largest increases at 5.1% in Glasgow – the lowest growth rate of the best performing city since 2012.

Richard Donnell, research and insight director at Zoopla, said: “Sellers are having to accept slightly higher discounts to the asking price in order to achieve a sale.

“This is a natural response to weaker market conditions and buyers are starting to negotiate harder on price.

“The increase between asking and selling price is off a low base. Correctly priced homes continue to sell within a reasonable period and setting the asking price at the right level remains a key decision to agree with your agent.

“Market conditions remain weak in London and the level of discounting continues to increase. We expect the price adjustment in London to continue although we do expect sales volumes to start to tick upwards.

“The slowdown in the rate of price growth is set to extend further across the south of England while we expect continued above average house price growth in regional cities where employment levels continue to grow, and affordability is attractive.”

It comes as agents reported the number of sales agreed has increased for the first time this year.

NAEA Propertymark says that the number of sales agreed in April per member branch increased to seven – the highest level since last October.

Supply and demand continued to falter among NAEA Propertymark members, though, with the number of properties available per member branch falling from 37 in March to 35 in April, albeit up from 33 this time last year.

The number of house hunters registered per estate agent branch fell from 296 to 265 between April and March, taking it to the lowest level for the month since 2008.

Mark Hayward, chief executive of NAEA Propertymark, said: “Despite a fall in housing supply and demand, it’s encouraging to see an increase, for the first time this year, in the number of sales going through.

“This means that even though buyers and sellers remain uncertain given the current climate, many are continuing to move forward with their transactions and sales are still happening at the rate we would expect to see at this time of year.

“More than four in five properties are selling for less than the original asking price, so there’s opportunity for house buyers and sellers to negotiate an offer to get a sale moving.”

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