House prices cut by up to 11% as North leads discount war

HOME sellers in northern towns and cities are offering the biggest discounts as the British housing market judders back to life.

Property website Zoopla found that where asking prices had been cut, sellers had offered the biggest discounts in Newcastle, with an average reduction of 11.2 per cent in May.

Seven of the top ten areas with the most drastic discounts were in the North. In Manchester and York – which had seen rapid house price growth before the Covid-19 crisis – the discounts averaged 9.1 per cent and 8.8 per cent, respectively.

The Kent seaside town of Folkestone was one of the top areas in the South for discounts, suggesting that house hunters there may be able to haggle for a good deal. Of the sellers who say they will now accept less than they previously wanted, asking prices fell by 10.5 per cent on average in May.

In some areas of the country, sellers have increased asking prices. The Scottish Borders leads the way with an average rise of nine per cent. The rural area on the outskirts of Edinburgh is popular for walking, cycling and fishing. Other areas where substantial asking price rises were recorded included upmarket Islington in London at 7.4 per cent and Hull, at 6.4 per cent.

London sellers appeared to be among the most confident that the value of their properties had held up in the lockdown.

Postcodes in the capital accounted for seven of the top ten areas where sellers had made t he biggest increases to asking prices. They were concentrated in the more affordable parts of the capital, popular with first-time buyers.

Sellers increased prices in outer boroughs Newham (3.4 per cent), Waltham Forest (3.4 per cent) and Havering (2.1 per cent).

The figures give the first indication of how sellers are reacting as t he housing market r eopens. Nationwide building society has predicted house prices will fall by as much as 14 per cent this year as recession bites.

A Royal Institution of Chartered Surveyors report found 80 per cent of its estate agent members had seen agreed sales collapse during the lockdown.

However, Nationwide’s research found many families wanted to move into larger homes, often with an extra room for a home office. Gardens are also popular.

Estate agents have also reported that many people are looking to move out of London to be nearer family and to find homes with more outside space. Oxford properties saw demand surge by 332 per cent on May 13, the day the Government lifted restriction on house hunting, according to Zoopla.

Experts said changes in asking prices largely reflected how sellers feel the housing market is being affected by the coronavirus crisis, as well as the competition for homes in their area.

Buying agent Henry Pryor said: ‘ We learnt from New Zealand, which opened its housing market before we did, that those who admitted that we had gone through a seismic event and trimmed their asking prices found that their homes sold quicker.

‘But since the market has opened up, we are still missing around half a million properties we would otherwise have had on the market, and that gives some sellers confidence they can maintain or increase their prices because there isn’t that much competition.’

He added: ‘It is always difficult for sellers and selling agents to decide whether they should quote a price that will get knocked down, or whether they should quote a realistic price that recognises the turmoil we’ve gone through.

‘It’s like parachuting in the dark. We don’t know where the ground is and we don’t know how fast we are falling. That makes it difficult for buyers and sellers alike.’