One in 10 sellers knocking more than 10pc off house price

THE property downturn has forced one in 10 sellers to slash at least 10pc off their asking prices as demand slumps.

High mortgage rates and the cost of living crisis mean homeowners are having to come to terms with the fact that buyers have drastically reduced budgets. Richard Donnell, of property website Zoopla, said: “One in 10 of the total number of homes listed on Zoopla have had their asking prices reduced by more than 10pc.” On a typical £294,000 home, based on the average UK house price in December according to the Office for National Statistics, this discount would be worth around £30,000.

A further 17pc of listed properties had asking price reductions of between 5pc and 10pc, Mr Donnell said.

Emma Fildes, of Brick Weaver, a buying agent, said: “Everything I’m getting sent is being reduced. Certainly for properties under £800,000, everyone is taking £50,000 off the price, and then another £25,000 comes off when the sale is agreed.”

Thea Carroll, an independent London buying agent, said: “We’re already seeing what I would call a ‘conversational 10pc’ – where the estate agent and buying agent agree that’s where the value sits under the instructed price – before formal negotiations have even started.”

Although mortgage rates have declined since they peaked in October, they are still far higher than in recent years. Capital Economics, a research consultancy, expects rates to settle at around 4.5pc.

Historically, mortgaged buyers have spent an average of 22pc of their posttax income on their mortgage bills. For this benchmark to be maintained, when mortgage rates are at 4.5pc, buyers must reduce their loan size from 3.3 times their income to 2.5.

This will be equivalent to a drop in loan size from £234,000 to £176,000, Capital Economics calculates.