Half of property sellers in England and Wales have cut their asking prices in the last month in order to secure a sale .
The new data from estate agent Hamptons also shows house price reductions have reached their highest level in at least nine years.
It comes amid house prices falling for the fourth month in a row and turbulence in the mortgage market. The average two-year fixed mortgage deal is now 6.84%, according to Moneyfacts.
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Mortgage rates have more than doubled since December 2021 when the Bank of England started raising the base rate.
And now it appears that high mortgage rates have forced sellers to proactively manage their expectations in order to get a sale over the line, with 54% of homes selling below their asking price across England and Wales in July, Hamptons said.
“Mortgage rates surpassing mini-Budget highs in early July added further caution to the housing market. Higher rates have acted as a wake-up call to sellers who had been on the market for some time, prompting a record share to cut their asking price,” said Aneisha Beveridge, head of research at Hamptons.
Affordable home sales take the hit
Most of the increase in price reductions has come from households selling more affordable homes where sales are more likely to be needs-based and where higher mortgage rates are hitting hardest.
It also took 73 days for the average seller to reduce their home in July - this is 17 days longer than in June.
Meanwhile, it took the average seller 49 days on average to accept an offer on their home last month, making it the slowest July to sell a home since 2013.
That said, the data also showed the average seller in England & Wales achieved 98.6% of their asking price in July. This is above the figure recorded pre-Covid in July 2019 of 98.0%.
“A steadier transition to higher mortgage rates would likely have left the housing market this year in a better place. Rather, both buyers and sellers have grappled with yo-yoing rates which have created uncertainty meaning many would-be movers are choosing to sit tight and wait for clarity,” said Beveridge.
“While the latest raft of rate cuts from lenders on the back of the improved inflationary outlook will help, the growing expectation that rates will stay higher for longer will be a tough pill for heavily mortgaged households to swallow.”
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