Sellers are forced to trim asking prices as home market stagnates

HOME sellers are being forced to cut their asking prices by 10pc or more as the market stagnates in the wake of surging interest rates.

A fifth of sellers are cutting prices by a tenth or greater, according to the property website Zoopla.

In London and the South East, the proportion of sellers accepting a discount on this scale rises to almost one in four.

The housing market has struggled in the wake of the cost of living cri- sis, which has forced the Bank of England to increase interest rates to a 16-year high. Mortgage costs have surged as a result.

However, Zoopla did find some reasons for optimism. Buyer demand has risen 12pc with the biggest increase in London, of 21pc. Agreed sales have also increased across the country, up 13pc compared with the same time last year with sales rising in all regions.

This indicates buyers and sellers are more aligned on pricing, according to Zoopla. Richard Donnell, executive director at Zoopla, said: “This improvement in activity will support sales volumes, which, at one million, reached an 11-year low in 2023.

“We don’t see these trends as a precursor to higher prices in 2024 as it remains a buyer’s market. Overoptimism

by sellers could quickly stall the current improvement in market activity.”

Buyers are also benefiting from a dip in mortgage rates over the past two months.

Rates have fallen below 5pc, aiding a seasonal bounce in the market that has been bolstered by pent-up demand from buyers who held off last year.

Although an unexpected rise in inflation in December may lead to a slight increase in rates again, mortgage brokers expect the direction of travel to remain downwards over the year.

The number of homes for sale has also risen, up 22pc compared with last year, in a sign of renewed confidence from sellers.

However, Zoopla warns sellers still need to be realistic about pricing if they are serious about moving in 2024 and should be open to negotiation.