UK property market: Gap between asking and selling prices widens as outlook weakens

Cautious buyers negotiating bigger discounts, with London, Manchester, Nottingham and Leicester reporting slowdown in price growth

London is experiencing a downturn but Edinburgh and Glasgow both report homes, on average, going for more than their asking prices

The gap between the asking price of homes and what they eventually sold for significantly widened last year as cautious buyers negotiate harder, according to new data.

The selling price for homes was, on average, 3.9 per cent below the asking price in the first three months of 2019, up from 3.3 per cent in the same period last year, according to Zoopla‘s latest Cities House Price Index.

The online property firm said this is substantially higher in London where the selling price was on average 5.7 per cent below the original asking price. Houses were sold at lower prices due to “weaker market conditions” and “harder negotiations” from cautious buyers, according to Zoopla.

The pattern was not universal, however, with Edinburgh and Glasgow both reporting average selling prices above the original asking prices, as demand for housing stock continues to rise.

Typically, properties in Edinburgh sold for 6.3 per cent more than their listing price, while homes in Glasgow shifted for 5.2 per cent above the asking price during the quarter.

Glasgow was also the city which reported the fastest house price growth during the period, with prices up 5.1 per cent against the same period last year.

Overall, house price growth has continued to slow, driven by a 0.5 per cent slump in house prices in London.

The softening of growth has extended far beyond the southeast, Zoopla said, with Manchester, Nottingham and Leicester all reporting a slowdown.

Average UK house prices rose by 2.2 per cent to £218,700 in the period, as growth slowed down from 3.1 per cent in the same period last year, according to the index.

Richard Donnell, research and insight director at Zoopla, said: “This latest index report reveals a continued moderation in the rate of UK city house price growth as the slowdown extends beyond southeastern England.

“Sellers are having to accept slightly higher discounts to the asking price in order to achieve a sale. This is a natural response to weaker market conditions and buyers are starting to negotiate harder on price.”

PA