Home sellers in the UK cut asking prices on more than 3,000 properties each day in September, according to Rightmove. This is the highest number of daily price cuts in 15 years. Rightmove attributes the rise in price reductions to a surplus of homes on the market and unrealistic seller expectations.
Key Details
The average price cut was nearly 7%, which is about £21,000 off a typical home. Homes that had price cuts took an average of 119 days to sell. In contrast, properties that kept their original asking price sold in just 39 days. The share of homes listed with a price cut reached 34% in September, slightly down from the peak of 36% earlier in the month.
Background
Rival property portal Zoopla noted that buyers are becoming more selective as mortgage rates rise to a three-year high. This has led to a 5% year-on-year increase in homes for sale, while the number of sales agreed fell by 9%. Zoopla indicated that many buyers are focused on keeping their monthly mortgage payments manageable. September is usually a month with many price cuts as sellers try to finalize sales before the year ends.
Related coverage: UK House Sales Dip 1% in July Amid High Mortgage Rates.
The trend of rising price reductions could affect the housing market, especially residential property values and mortgage lending. Increased caution among buyers may lead to further declines in sales activity.
Investors will be watching for upcoming housing market data and trends in mortgage rates that could impact buyer behavior and property values.
Based on reporting by: bbc.com, bbc.co.uk