Zoopla’s latest House Price Index found that six in 10 relisted homes came back to market at a lower asking price, while the rest remained at their original asking price.
According to Zoopla, with average mortgage rates now at 5.2% and the highest for three years, the average homebuyer faces paying an additional £150 per month or £1,800 in mortgage repayments.
The firm said this was weighing on demand and resulting in declining agreed sales.
Flats and larger homes were the most relisted property types and took the longest to secure a buyer.
The report showed that in London, a third of flats listed had been on the market before, compared to less than one in 10 in Scotland.
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Further, homes were being relisted in regions where buyers had more choice. Zoopla’s data showed that the number of homes for sale was 5% higher than last year, while sales agreed over the last four weeks were 9% lower.
This imbalance was recorded across most of England, especially London and the South, where there was an 8% rise in the number of homes for sale.
The West Midlands saw the steepest fall in agreed sales, down 15% year-on-year, while this was down 14% in the East of England.
Activity in Scotland was stable, with agreed sales down 1% compared to a 3% rise in the number of homes for sale.
Flat prices decline
Zoopla found that the average house price in the UK was £273,000, a slowing of 0.8% growth across all property types. This was compared with a rise of 1.7% last year and 0.9% the month before.
Flat prices continued their 15-month downward trend, while house prices rose by around 2-2.5% over the last year. However, this has slowed in recent months due to higher mortgage rates and fewer sales.
Flat prices recorded falls in nearly every region except for Scotland and the North East. Meanwhile, house prices rose the fastest in Northern Ireland, followed by the North West, with a 3.6% year-on-year rise. In Scotland, prices increased by 3%, and the North East saw rises of 2.4%. Price growth was flat in most of Southern England.
Richard Donnell, executive director at Zoopla, said: “The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity. Borrowing costs are likely to remain elevated, with house price inflation drifting towards 0.5% by year end and annual sales expected to be closer to 1.1 million versus 1.2 million last year.
“While key measures of housing market activity are lower than last year, there is still plenty of demand for homes. Buyers are simply more cautious and selective about what they view and offer. Sellers who factor in local market conditions and seek detailed advice from their local estate agents on how to set the asking price can still find a buyer relatively quickly.
“Getting the right price from the outset is essential. If you are selling an affordable two- or three-bed home in the North of England, it is a strong market. The most challenging pricing decisions face sellers of flats and larger houses across Southern England.”
