UK property sellers are increasingly forced to accept significant price reductions to finalize sales. Data indicates that between July and September, the average home sold for roughly 90.6% of its original listing price.
The collapse from 2022's 100% asking price achievement
The current UK property market represents a stark reversal from the pandemic-era boom. According to Knight Frank, sellers in the July-to-September period achieved an average of only 90.6% of their initial asking prices, a sharp decline from the 100% average seen between July and September 2022. This shift is largely attributed to a combination of elevated mortgage rates and a surplus of available homes, which has granted buyers significantly more leverage.
This trend highlights a broader cooling of the market compared to the "race for space" seen during the 2021 and 2022 stamp duty holiday. While buyers once competed for limited inventory, the current glut of homes has transformed the landscape into a buyer's market where sellers must often compromise to avoid properties sitting stagnant.
The £250,000 premium market penalty
High-end real estate is feeling the brunt of this economic shift more acutely than the broader market. TwentyCi data reveals that properties priced at £2 million or more are currently struggling, sleling with an average discount of nearly £250,000. these luxury assets are also twice as likely to remain on the market for extended periods compared to homes priced below the £2 million threshold.
The stagnation is particularly visible in London's most expensive postcodes. Analysis from Garrington Property Finders shows that in areas where homes exceed £1 million, only 28% of listed properties successfully found a buyer during the third quarter. For every one sale agreed upon in these premium London districts, approximately 3.6 homes remained listed, illustrating a significant imbalance between supply and demand.
The 'discount two-step' emerging in Southern England
Sellers in Southern England are increasingly adopting a tatical approach known as the "discount two-step" to navigate the difficult market. As reported by Garrington Property Finders, this method involves an initial price reduction to generate interest and viewings,followed by a second, further reduction durng the formal negotiation phase with a potential buyer.
This behavior is a response to the high withdrawal rates seen across the country. In London, for every 100 sales agreed, 62 homes were withdrawn from the market—a rate double the national average. Rather than enduring long periods of stagnation, many sellers are choosing to either exit the market entirely or engage in these aggressive, multi-stage pricing strategies to find a buyer.
The mystery behind the 26% Southwest London discount
While the national average discount sits near 10%,specific cases suggest much deeper price corrections are occurring in prime areas. Jo Eccles, the founder and managing director of the London buying agency Eccord, recently reported securing a 26% discount on a property in southwest London. Such deep cuts are often the result of properties being listed with "over-optimistic" prices that do not refelct current market realities.
This raises critical questions about the integrity of initial asking prices across the UK property market.. Is the discrepancy caused by sellers attempting to recoup personal costs like stamp duty and renovations, or is it a result of estate agents intentionally overvaluing homes to win client instructions? Furthermore,it remains unclear whether these deep discounts represent a true market correction or if the "true value" of these properties is being obscured by artificial listing prices set by agents to stay competitive.
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