Across the south east of England, asking prices are being slashed as home sellers struggle to find a buyer.
Eight of the ten places in the UK that saw price reductions of 5 per cent or more are in the South East, according to data shared exclusively with This is Money by property website Zoopla.
Thanet in Kent, which includes the town of Margate, has seen prices fall by 5 per cent or more in more than a fifth of all current property listings in the last 90 days.
In Dover, Brighton and Hove and Surrey Heath, almost one in five offers in the last 90 days have had their price reduced by at least 5 percent.
Cuts in the South East: Eight of the ten areas of the UK that have seen the highest proportion of price cuts of 5 per cent or more in the last 90 days are in the South East
Overall, 11.8 per cent of UK homes have experienced price reductions of 5 per cent or more in the last 90 days, according to Zoopla.
In the previous five years, the share of homes that had their price reduced in the same 90-day period was just 6.9 percent.
Rightmove has also reported that more than a third of homes for sale have had their asking prices reduced, the highest since January 2011.
It said the average discount on a home for sale fell by 6.2 per cent, or £22,700.
Zoopla says many more home sellers are cutting their asking prices by 5 percent or less, with some fearing larger cuts could impact what they can buy next.
But larger price cuts of 5 percent or more appear to indicate that more sellers, particularly in the Southeast, are becoming more desperate to attract buyers’ interest.
Cut: These are the areas in each UK region that have seen the biggest house price falls
Izabella Lubowiecka, property researcher at Zoopla, said: “The demand for discounts shows that sellers are being more realistic when setting prices.”
“Many sellers are realizing that the increases in home values from the pandemic are giving them a buffer that they can use to stimulate sales.”
“Serious sellers looking to sell soon should have an honest conversation with an agent to ensure the property they are selling is priced correctly for the current market.”
“Adding price adjustments occur across the board. “As a downsizer or upsizer, this means that the price adjustment affects not only the property you are selling, but potentially the property you want to buy next.”
Is the real estate market ripe for bargain hunting?
Whether the market is ripe for bargain hunting or not will clearly depend on what happens to property prices.
It will vary from market to market, but there may be more opportunity to haggle and negotiate below the asking price.
Charlie Lamdin, founder of BestAgent, says buyers should offer prices that are outside their budget
Charlie Lamdin, founder of real estate company BestAgent, argues that anyone looking to buy right now should aim high and make low offers.
“In a falling market, look at homes with asking prices that are outside of your budget,” says Lamdin.
“Realtors are now calmer and more willing to show you houses that they were too busy to view a year ago.
“Motivated sellers seek security of sale rather than top dollar. This presents a great opportunity for well-prepared buyers, especially if they are off-chain.”
Chris Sykes, associate director at mortgage broker Private Finance, says he has seen more offers on high-value properties being accepted at significant discounts.
He says: “In recent weeks we have seen signs of a revival in demand for high-quality properties from high net worth individuals and individuals with significant incomes.”
“These properties, which have recently accepted offers, have typically been on the market for some time and are now being sold at a discount of around 10 percent to the original asking price.”
However, Henry Pryor, a professional buyer, says buyers need to be careful not to take the asking price too literally.
Henry Pryor, a professional real estate agent and real estate expert, says asking prices are not necessarily an indication of value
In his opinion, an offering price is not necessarily an indication of value, nor is it an indication of what the seller might accept.
Nor is it necessarily what the real estate agent recommended or what a mortgage appraiser might confirm.
Pryor says, “It’s amazing how many people confuse asking price with value.”
“It’s just part of marketing, but many people judge the success of a sale or purchase based on the ticket price.”
“It’s a combination of the owner’s greed and the agent’s ‘excitement’ to get the deal.”
“The biggest discount on the asking price we have achieved so far this year is 11 percent, but one of our best deals resulted in us paying 10 percent more.”
“Remember that the asking price is not an indication of value or an indication of what the seller will accept.”
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