Zoopla House Price Index: Property supply reaches six-year high with sellers accepting less for their home

UK homeowners are selling their properties at a higher rate but agreeing to larger asking-price discounts, according to Zoopla's latest House Price Index. The report found a 'buyers market' is being fuelled by an average discount of £18,000 with a six-year high property supply.

On Tuesday, the British real-estate company published its look into the latest housing trends and how this forecasts the market for next year. Despite an increase in homes for sale, higher mortgage rates continue to deter buyers from the market, meaning fewer sales and widespread house price falls.

Zoopla found the percentage of homes on the market has risen by 34%, in data taken from the four weeks to November 20 compared to the same period in 2022. The increased market supply is evidence of a strong buyers market, leaving property hunters with more choice and negotiating power.

However, current buyer demand sits 13% lower than normal market conditions, according to the number of enquiries sent to estate agents for homes listed for sale on Zoopla. The number initially spiked since the Autumn 2022 mini-budget but dropped over the summer as mortgage rates increased.

Propertymark, a professional body for estate and letting agents, said buyers remain 'cautious' when property hunting but estate agents are 'encouraged' to see more homes on the market alongside a boost in property sales. “We continue to witness an uncertain housing market in many regions with people remaining cautious on their approach," said Nathan Emerson, CEO of Propertymark.

"It is however reassuring to see inflation dipping back down and interest rates currently being held steady, although we must bear in mind that Andrew Bailey, Bank of England Governor, has hinted there will be no quick drops in base rate for the foreseeable future in order to keep inflation in check. It’s important to remain realistic and allow the dust to fully settle before confidently feeling all is robust again." Mr Emerson added: "It is encouraging to see Zoopla report sales volumes starting to climb, likewise it’s also extremely positive to see a jump in the number of homes now on the market when compared year on year."

The average discount - which sits at 5.5% lower than asking price - is at a 5-year high. In London and the South East, buyers have even more negotiating power with sellers accepting bigger discounts of £25,000 below asking price.

Richard Donnell, executive director at Zoopla, said: “These are the best conditions for home buyers for some years, with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale. There is a growing acceptance that what a home might have been worth a year ago is now largely academic given current market conditions. Sellers have plenty of room to negotiate, with average house prices still £41,350 higher than the start of the pandemic."

In Scotland, house sales are steady across several regions whereas market activity is growing in inner London. According to Zoopla, the UK housing market is on track for one million sales agreed in 2023.

Mr Donnell added: "It’s a positive sign that new sales continue to be agreed at a faster rate than a year ago and pre-pandemic. This indicates that house prices do not need to post bigger falls to get people moving but sellers need to be ready for more negotiation on price. New sales will slow as we run up to Christmas and some sellers will take homes off the market ready to relaunch in the new year."