The housing bubble has burst, analysts have said, after sellers started slashing money off their asking prices and accepting offers up to 10 per cent less than the property was listed, reports The Independent.
The average discount on the original price of a property across Britain is now more than £25,000, up £4,000 compared to the discount in January, according to Zoopla, an online property portal.
In January, the average amount that a property price dropped between initial listing and sale was £21,560.
The price of 29 per cent of listings on the Zoopla website have been cut at least once since they were listed.
The North of England is home to eight of the ten areas with the highest proportion of houses selling for lower than before.
Almost half of all properties listed in St Helens (43.7 per cent), Hartlepool (42.5 per cent) and Middlesbrough (40 per cent) having been marked down. Also in the top 10 are Haverfordwest in Wales, and Great Yarmouth in East Anglia.
Henry Pryor, a housing analyst, said he had worked through three property recessions and that this market has a frighteningly familiar feel to it.
“I think [the housing bubble] has popped,” he said.
He noted that estate agents are making fewer sales at the top end of the market, prices in London are up to 15 per cent off their asking price and lenders are turning to riskier financial products, like the 100 per cent mortgage announced by Barclays, to make sales.
“These are all warning signs that we have reached the top. This is ‘peak property,’” Pryor told The Independent.
Halifax, a mortgage lender, said on Monday that the average house price fell a sharper-than-expected 0.8 per cent in April, partly because of a hike in stamp duty for buy-to-let investors on April 1.
Annual property prices rose 9.2 per cent, Halifax said, the lowest since last autumn.
The stamp duty increase may have skewed industry figures in April as buy-to-let investors rushed to make property purchases before they could be affected by the increase.
Demand may have been affected after the hike as sellers offered bigger discounts to try and make a sale.
Michelle Ricci, co-founder of property analysts Propcision, said that any reductions in asking price are bringing the asking price to the same level as last year, keeping prices static.
“We feel the data suggests asking prices are holding steady with levels seen in the past 6 months,” Ricci said
“That said, there are particular areas of vulnerability that may start to show demonstrable evidence of a downward trend – most notably new-builds,” she added.