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Price cutting hits 7-year high as demand in the market drops

Reduced demand in the market has led to price-cutting becoming the new norm, according to home.co.uk.

Its ‘October Asking Price Index’ recorded the East of England as the latest region to join the year-on-year negative group, with the slowdown spreading north and west.

The company predicts that prices will slide in these regions for several years as the ‘double-bubble’ deflates, with other regions soon to follow.

Overall, the mix-adjusted average home price for England and Wales has nudged up slightly, driven by significant leaps in Yorkshire and the West Midlands as their regional property booms reach their climax.

What’s more, both mean and median marketing times are longer than a year ago and continue to increase. Currently, year-on-year price growth is just 0.6% while stock levels are rising.

The trend of supply-induced slowdown with a reduction in demand – which led to market saturation in London, the South East and East of England – has now reached the East Midlands. Supply is up by 9% compared to a year ago, with price falls imminent.

Contrary to the significant slowdown in the South and East, the property markets in the northern and western regions are outperforming the rest by a price-cutting margin in terms of price growth. Wales, especially, leads the price growth table ahead of the West Midlands and the North West.

Generally, supply of property for sale in the UK is up by 6% and the total stock for sale has increased by 10.7% year-on-year. In October last year, the annualised rate of increase of home prices was 3.3%, compared to today’s measure of just 0.6%.

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