One Third of Homes Reduced as Average Price Falls £5,000 in a Month

Rising Price Cuts Signal a Shift in the Housing Market

A significant portion of homes currently on the market have seen their asking prices reduced, as homeowners face challenges in finding buyers. This trend reflects a broader shift in the real estate landscape, where sellers are increasingly adjusting their expectations to match buyer demand.

Despite the average asking price for new listings dropping by 1.3% or £4,969 to £368,740 in the past month, many properties are still struggling to attract interest. Over the summer, the typical asking price has decreased by £10,777, which is more than usual during this time of year. According to Rightmove, 34% of homes for sale have had their prices lowered since being listed. This represents the second-highest level of discounts since 2012, only surpassed by the previous year when high mortgage rates deterred buyers.

Rightmove’s property expert, Colleen Babcock, noted that some sellers are setting their prices too high, making it difficult to find a buyer. She explained that astute buyers are now benefiting from lower asking prices, with an average reduction of £10,000 compared to three months ago. In a high-supply market, a competitive price is essential for closing a deal.

The average time it takes to sell a home is now 62 days. However, if a property doesn’t require a price cut, it typically sells in 32 days, whereas those that do see a longer period of 99 days. Babcock emphasized that while it's better to set the right price initially, if a seller must reduce the price, acting quickly is crucial to avoid further delays.

The current market remains favorable for buyers, with the number of homes for sale up 10% compared to last year—a level of supply not seen in a decade. At the same time, the number of sales being agreed is 8% higher than this time last year, as buyers take advantage of discounted properties. July marked the best month for sales since the post-lockdown housing boom in 2020.

Steve Beercock, executive director at Beercocks estate agents in Yorkshire & the Humber, observed a strong start to August, with a surge in sales agreements early in the month. He stressed the importance of getting the price right from the beginning to avoid the need for future reductions.

On an annual basis, property prices have increased by just 0.3%, indicating a slow growth trend. Additionally, the number of new homes coming onto the market is slowing down. If this trend continues, it could ease the pressure on sellers to offer discounts.

Rightmove reported that the number of new properties for sale is only 4% higher than this time last year. Buyers are encouraged not to hesitate if they find a home they like. Amy Reynolds, head of sales at Antony Roberts estate agents in Richmond, London, noted that some well-priced homes remain unsold because buyers are waiting for further price drops.

As the traditional summer holiday period comes to an end, the market is expected to become busier in the autumn. Those who wait may find their preferred property sold before they can act. It’s advisable to reach out to sellers to understand their position and make an informed decision.

The Bank of England’s recent decision to lower interest rates may lead to slight decreases in mortgage rates, potentially boosting the market. However, the future direction of these rates remains uncertain, so significant drops in mortgage prices are unlikely in the near term.