The proportion of London home sellers dropping their asking price is rising as the property market slumps further.
With more than four in 10 revising lower, the average price cut of 6.7 percent reflects “initial over-optimism and a tougher market,” Rightmove Plc said in a report published on Monday.
New vendors coming to the market in November are also reducing their expectations, albeit more modestly, with a 0.2 percent decline from a month earlier to 628,219 pounds ($824,000). That’s an annual drop of 2.4 percent—a far cry from growth of more than 20 percent in 2014.
“Buyer demand has cooled and to warm up their interest both new-to-the-market sellers and those already on the market need to tempt them on price,” said Rightmove Director Miles Shipside. “The effect is an impromptu autumn sale with the largest proportion of sellers on the market having reduced their initial asking prices at this time of year since 2010.”
While London has been worst affected by the cooling of UK housing, the rest of the country is also seeing widespread reductions, with 37 percent of sellers nationwide cutting their asking price. The average price for new properties to the market fell 0.8 percent from a month earlier, to 311,043 pounds, although that’s still 1.8 percent higher than a year ago.
A separate report by LSL Acadata showed annual house price growth in the UK slowed to 0.8 percent last month, the weakest pace since March 2012. Transactions slumped 5 percent in the first nine months of the year compared to the same period in 2016.
However, the Bank of England’s decision this month to raise interest rates for the first time in a decade will have a limited impact on demand, damped by the high proportion of households on fixed-rate mortgages and competition among lenders, Acadata said.
Still, the weakening property market and the prospect of higher borrowing costs may be taking a toll on consumers. In a separate report, Visa said spending fell at the fastest pace since 2013 last month.