Desperation enters UK property market as owners slash prices by over 6%, it is claimed

Around 36.4% of sellers have reduced the amount they are asking for their property at least once since August with the average property reduced by 6.1%, the equivalent of nearly £16,000, the study from property website Zoopla shows.
 
The reductions are being made in response to a shortage of buyers, as many people adopt a wait and see approach until the outlook for both the property market and the wider economy become clearer. But sellers are continuing to come to the market, creating a mis-match between supply and demand and putting downward pressure on prices.
 
The group said many sellers were likely to have reduced their asking prices during the previous three months in a bid to secure a sale before Christmas.
 
‘For the past few months asking prices have been somewhat out of kilter with what buyers are prepared or can afford to pay, but sellers are becoming increasingly realistic,’ said Nicholas Leeming, commercial director at Zoopla.
 
‘The traditional New Year influx of properties coming to the market for sale will mean even more competition among sellers and many are keen to try to secure a buyer this side of Christmas and are lowering their expectations accordingly. As a result, now is a great time for buyers to try to land a bargain,’ he added.
 
Half of all sellers in Swindon have reduced their asking prices at least once, as have 47% of people in Norwich and 46% in Bournemouth. More than 40% of sellers have also reduced the amount they are trying to get for their property in Northampton, Leicester, Poole, Birmingham, Bristol, Exeter and Coventry.
 
But the biggest price reductions have been made by homeowners in northern towns, with those in Manchester slashing their asking prices by an average of 7.15%, while those in Newcastle have reduced them by 7.13%.
 
Zoopla also believes that job losses in the public sector outlined recently in the government’s comprehensive spending review will affect the property market.
 
Areas like Oxford where 46% of people are employed in the public sector are likely to be hit the hardest. Average house prices in Oxford have already fallen by almost 4% over the past three years to a current level of £326,396.
 
Other areas where public sector cutbacks will see falling house prices include Cambridge, Middlesborough, Hastings, Canterbury, Stafford and West Dorset. Public sector employment accounted for over 40% of the workforce in these areas.
 
The City of London was least likely to see much impact on house prices due to public sector cuts as only 4% of workers were employed in the public sector. Other areas where property prices may only be marginally impacted by the cuts include Crawley, Corby, North Warwickshire, Broxbourne, North West Leicestershire and Bracknell Forest.
   
‘In areas where more people are employed by the state, rising unemployment will lead to more homeowners struggling to pay their mortgages as well as dampening demand from buyers, which will put downward pressure on house prices in these areas. House prices are likely to be far more resilient in areas with a smaller share of public sector employees,’ said Leeming.