If you’ve been browsing property websites lately, you may have noticed a lot of homes marked as “reduced”. You’re not imagining it. In September, sellers across Britain lowered their asking price on more than 3,000 homes a day on average. Rightmove says that’s the highest monthly total it has seen in 15 years.
For anyone trying to buy, that changes things. Here’s what the trend means for you, and how to make the most of it without getting caught out.
Buyers have more say right now
The balance has shifted in your favour. Zoopla says buyers are now in a strong position, and its figures back that up. In September there were 5% more homes for sale than a year earlier, but 9% fewer sales were agreed.
More choice means less pressure to rush. Buyers are taking their time, being more selective about viewings, and comparing homes carefully before they commit.
There may be room to negotiate
The cuts aren’t small, either. Rightmove found the average reduction was close to 7%, which is almost £21,000 off a typically valued home. Around a third of homes on the site had their price lowered last month.
A reduced price isn’t always the final word. Katie Griffin of Devon surveyors Sawdye and Harris says sellers who have had to cut their price can end up accepting less than even the new figure. If a home has been on the market for some time, there may be scope for a sensible offer below the asking price.
Don’t write off a reduced home
It’s natural to be wary of a property that has sat on the market and then dropped its price. Rightmove’s Colleen Babcock says some buyers begin to ask questions in that situation, even when the home has nothing wrong with it.
Often, the explanation is simple. Rightmove points to some sellers starting with an unrealistic price, and Tarah Lourens of Rightmove says emotion can play a part in how sellers value their home. Zoopla also found that a quarter of homes newly listed in September had been up for sale at some point in the past year, and six in ten of those came back cheaper.
So a price cut could just mean the seller has been brought back down to earth. It’s still worth asking the agent why the home hasn’t sold, but don’t rule it out on that basis alone.
Lower prices, but budgets are still stretched
Cheaper asking prices don’t tell the whole story. Mortgage rates have climbed to a three-year high, and Zoopla says buyers need to keep their monthly repayments affordable. For many, that means a strict upper limit on what they can spend.
In other words, a price cut can bring a home within reach, but higher borrowing costs may eat into some of that saving. It pays to work out what you can comfortably afford each month before you start viewing.
Leasehold and location make a difference
Not every bargain is equal. More buyers have been avoiding homes with an element of leasehold, and sellers have told the BBC about the extra problems these properties face in England. A lower price on a leasehold home may reflect that, so it’s important to understand exactly what you’d be taking on.
Where you’re buying matters too. In Scotland, sellers must get an independent valuation, called a Home Report, before a home goes on the market. Zoopla’s Richard Donnell says this gives a clear guide to pricing, and 74% of Scottish homes listed between April and June sold within three months. In London, the figure was 30%. Donnell links the slower pace in southern England to higher prices, stamp duty, and some owners, including landlords, being in no hurry to sell.
Tips for buyers
- Set your monthly budget first, then look at prices.
- Check how long a home has been listed and whether its price has changed.
- Ask the agent why a reduced home hasn’t sold yet.
- Don’t be afraid to make a fair offer below the asking price.
- If a property is leasehold, find out what that means for you before you commit.
How we can help
Finding the right home at the right price is only half the job. Our conveyancing team can guide you through the legal side of your purchase, including explaining what owning a leasehold property would involve. If you’re thinking about buying, get in touch to talk through your plans.
Figures from Rightmove and Zoopla, as reported by BBC News. This article is general information only and isn’t legal advice.