London Property Sellers Cut Asking Prices Amidst Slow Market Recovery

March 30, 2024

The latest report from Zoopla has shed light on the challenges facing property sellers in London, as they grapple with sluggish market conditions. Sellers in the capital are reportedly offering discounts averaging £19,500 off asking prices in a bid to secure sales. While this figure represents a slight improvement from November’s 6.1 per cent discount, it underscores the persistent caution prevailing in London’s property market.

Slow Return of Confidence

Despite a modest increase in supply, with an eight per cent rise in the number of homes hitting the market, confidence appears to be slow to return to London’s property sector. Richard Donnell, executive director at Zoopla, attributes this caution to lingering uncertainties despite factors like rising wages and falling mortgage rates bolstering consumer confidence.

Buyer’s Market Dynamics

The report indicates that while house prices are falling at a slower rate, it remains a buyer’s market characterized by ample choices for prospective homebuyers. Donnell emphasizes the need for sellers to remain realistic with their asking prices to capitalize on improving market conditions and facilitate successful sales.

Nationwide Trends

Similar trends of narrowing asking prices were observed across the UK, with sellers accepting a median average discount of £10,000, down from £14,250 in November. Annual house price inflation saw a slight uptick, but London experienced a 0.4 per cent decrease, with the average home costing £534,000.

Continued Adjustments Expected

Zoopla anticipates that current trends in house prices, marked by adjustments to higher mortgage rates and reduced buying power, will persist into the second half of the year. Despite challenges posed by mortgage costs, the housing market has demonstrated resilience, with steady demand observed from buyers, particularly in London.

Outlook for the Market

Matt Thompson, head of sales at Chestertons, notes that March concluded the first quarter of the year with a bustling property market, driven by steady demand. Despite some buyers pausing their search in anticipation of incentives that failed to materialize in the Spring Budget, the majority have since resumed their property hunt, underscoring the enduring demand-supply imbalance in the capital’s housing market.