Family homes linger unsold for longest time in 14 years
Expensive family homes are lingering unsold for the longest time since 2009 as sellers are forced to reduce asking prices at a record rate.
Homes that cost between £500,000 and £1m are being advertised for nearly 11 weeks (75 days) before an offer is agreed, according to Hamptons estate agents.
The market for these properties has had the biggest slowdown in the past year, with 2023 marking its worst year since 2009.
This part of the market tends to be dominated by upsizers, especially in the south of England, who have been hit hard by higher mortgage rates and have increasingly limited abilities to borrow extra funds.
Meanwhile, smaller and cheaper homes have fared better as first-time buyers have “traded down their expectations to purchase their first home”, Hamptons said.
Sales for one-bedroom homes have also slowed down but still remain swifter than in 2019.
To attract buyers, many sellers are discounting their properties.
The proportion of sellers reducing their asking prices before making a sale has reached its highest level since Hamptons’ records began in 2012.
Of the homes sold following a price reduction, the average buyer went onto negotiate an extra 1.4pc discount from the final asking price.
Although 23pc of sellers in England and Wales sold above their asking price last year, 55pc agreed to a discount.
The proportion of sellers achieving at least their asking price fell to its lowest level since 2020.
The average discount negotiated by a buyer was 3.5pc last year on average. During the last housing market downturn discounts were 5.1pc on average.
Hamptons said there was a mismatch between what price sellers expected to achieve and what buyers were prepared to pay, resulting in more negotiation in 2023.
More price reductions are expected this month on properties that failed to sell in 2023, continuing a trend seen in December as sellers started preparing for the new year.
The average home reduced last month had been on the market for 75 days, up from 64 days in November.
Aneisha Beveridge, head of research at Hamptons, said: “2023 will go down as a subdued year for the housing market. The cost of living squeeze coupled with yo-yoing mortgage rates created an air of uncertainty and meant that households chose to sit tight rather than move.”
However, she said falling mortgage rates meant the housing market “is entering the new year on a much firmer footing” than it was a year ago, which is expected to attract more buyers in 2024.
Sellers in the South West, Yorkshire and the Humber and North West achieved the smallest proportion of their asking prices, while those in the North East – where house prices are lower and mortgage rates have less of an impact – fared best.
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