Properties are selling for an average discount on asking price of 3.7% across the UK, Hometrack data suggests.

Figures from the property data supplier show that Manchester had the lowest level of discounts as of June, at 2.2%, as well as the highest annual house price growth among the UK’s 20 biggest cities at 7.4%.

Liverpool, which has the second fastest rate of annual house price growth at 7.2% on average, has also seen the highest level of discounts to asking price at 4.6%.

Hometrack’s figures, part of its UK Cities House Price Index, show that discounts in Liverpool have always been at around 4%, and it is areas in the south of England that have seen the biggest increase in cuts.

Southampton has seen discounts grow from 2% to 4% since the start of the year.

In London, discounts have fallen from 7% to 6.7%.

The capital is still one of six UK cities that are seeing house prices grow at below the 2.4% rate of inflation, with the biggest fall in Aberdeen where average values are down 2.8% annually.

Overall, average prices are up 4.6% annually among the 20 UK cities to £259,700.

Richard Donnell, insight director at Hometrack, said: “After two years of falling sales volumes and rising discounts to achieve a sale, there are some signs of life returning to the London housing market. Discounts are finally starting to narrow as sellers become more realistic over pricing.

“While prices in London have picked up over the last quarter, we expect the annual rate of growth to remain weak for the foreseeable future. The positive news is that greater realism on the part of sellers will support transactions, which have fallen by 20% since 2014.

“The UK market is operating at two speeds at the moment, with growth in regional cities in the midlands and north-west far outstripping those in the south. However, affordability pressures in the south-east in particular are having a slowing effect on house prices as borrowers are priced out of the market.”