Home purchase discounts as a way to seal the deal
Rising interest rates in the UK have reduced purchasing power. Many people have postponed major purchases. The housing market was the first to suffer, with activity falling sharply. The situation was exacerbated by tightening mortgage lending rules, which most banks adopted to protect themselves from losses. In the hope of making a profit and stimulating the market, vendors offer discounts on purchasing homes.
According to Zoopla’s industry analysis, property buyers can achieve significant discounts on properties when negotiating with sellers. Both parties are keen to seal the deal, and owners are making concessions. In September 2023, the average discount requested was 4.2%, the highest since 2019. Seller’s willingness to reduce the price of a home varies by region:
– in London, its suburbs and the south-east of the UK, a discount can be as high as 4.8%;
– 2.8% in the rest of the country.
According to Richard Donnell of Zoopla, one in ten properties on the residential market has fallen in price by 10% or more before being sold. The reason for this situation, according to the expert, is the sector’s adjustment to changing economic conditions. This is mainly due to the increase in interest rates on loans to purchase real estate. Since the end of 2021 in the UK, they have been revised 14 times, negatively affecting buyers’ opportunities. As a result, owning a home has become an almost unattainable goal for many people.
At the same time, people are trying to find ways to buy, as evidenced by the market dynamics. The analysis shows that in the autumn of 2023, the demand for properties started to grow for the first time since the spring. The number of enquiries to agents about buying property increased by 12%, but experts note that demand is still almost 30% lower than in 2022.
It is worth noting that buyers and sellers are trying to find the best solution, so they are negotiating and offering discounts.
An overview of affordable home in the UK
Another way to become a homeowner in a volatile market is to look for affordable options across the country. Experts at Halifax have identified a number of places in the UK where you can buy a home relatively cheaply. These are outlying areas and the periphery. However, research shows that around 40% of 18-34-year-olds are willing to consider smaller towns and cities for a home. Affordable areas of the country:
– Kingston-upon-Hull: The average property price is around £156.5 thousand, 23% lower than the surrounding area;
– in Middlesbrough, the average property costs £156.8 thousand;
– in Derry City, Ireland, a property costs £160.6 thousand;
– in Falkirk, Scotland, prices are around £165.6 thousand.
Overall, the 10 locations in the UK have housing costs around £132,000 lower than the rest of the country.