Reductions in asking prices to align with price-sensitive buyers are a common occurrence right now but don’t reduce yours by too much too soon….

Reductions in asking prices to align with price sensitive buyers are a common occurrence right now.

Individual property reductions will vary according to each property type, so be sure to ask advice from your agent.

But don’t reduce your asking price by too much too soon, as demand picks up around Easter and the value you get from your home will unlock your next move.

Prices are adjusting across the market, so if you’re selling, it’s heartening to know that the home you want to buy is likely to be reduced in price too.

Asking price reductions – a means to achieve a sale

Cost-of-living pressures and increasing mortgage rates have caused buyer demand to decline in recent months.

The buying power of the average home buyer shrank by a fifth in 2022. Anyone serious about selling their home this year needs to take this shift in buyer circumstances into account and be realistic about how they price their property.

Right now, 4 in 10 properties listed on Zoopla have undergone price reductions of at least 1% and sellers are increasingly working with agents to adjust their prices and attract buyers.

Asking price reductions in February

How much sellers are willing to cut their asking prices by depends on personal circumstances and their local housing market.

The price achieved will ultimately dictate what the seller can buy next.

Last month, over a quarter of sellers opted for larger adjustments, reducing asking prices by 5% or more. This shows us that motivated sellers are open to more serious discounting.

These reductions will naturally equal different monetary values in different areas of the country.

Nationally, we see sellers are typically cutting asking prices by £10,000 to £15,000.

In London, where house prices are higher, sellers adjust their asking prices by £25,000 to £30,000 on average.

In more affordable parts of the country, such as the North East, adjustments between £5,000 and £10,000 are the most common.

Asking price reductions most common in southern England

We are seeing sellers across the country cutting their asking prices.

But we’re also seeing that asking price adjustments are most common in southern England. In London, almost half of properties currently listed on the market have had a price decrease, followed by 44% in the South East and 42% in the East of England.

Average property prices in these regions are much higher than elsewhere in the UK.  That means that the impact of higher mortgage rates is bigger, hitting buyer demand harder.

This creates conditions where sellers need to act more decisively to achieve a sale.

Which property types are impacted?

Asking price adjustments are impacting flats to a greater extent than houses. One in 5  flats listed on Zoopla in February had an asking price reduction of at least 5%, while only one in 6 houses had a similar price change.

In recent years, demand for flats has been lagging behind demand for houses.

Apartment owners understand that pricing competitively is even more important for this property type if they want to achieve a sale.

This is becoming more important as buyers are becoming more price-sensitive.

Is reducing an asking price a bad thing?

Not necessarily. Asking price adjustments are happening across the board. As a downsizer or upsizer, this means that repricing will affect not only the property you are selling but quite possibly the one you may be looking to buy next.

A change in asking price can speed up the selling process.

Only 7% of listings that have undergone a price reduction this year have remained unsold by the end of February.

For a third of those properties, a modest adjustment of up to 5% was all they needed.

When adjusting asking prices, timing is important as well. Historical data shows buyer demand picks up around Easter.

Our advice for serious sellers looking to sell in March is to have an honest conversation with your agent to ensure your property is priced at the right level for the current market.

It is welcome to see evidence of greater realism from sellers on pricing. Many sellers will see that recent property value gains equip them with a buffer they can use to unlock sales.

This shows that sellers have got room for manoeuvre without a significant loss to equity that would have been built over many years.

Key takeaways

  • Some 4 in 10 properties currently listed on Zoopla have their asking price reduced by at least 1%
  • The most common reduction is between £10,000 to £15,000
  • Those selling property in the more expensive regions of southern England are more likely to drop their asking price
  • Asking price cuts are more common for flats than standard family-size houses
  • Widespread reductions show greater realism from sellers on pricing, possibly thanks to the large capital gains made during the pandemic