Property sellers are being forced to slash the asking prices on homes despite reductions to mortgage rates making it cheaper for buyers to borrow money.
Some 7 per cent of sellers in London and 6.6 per cent in the rest of England have cut the asking price on their home by more than 5 per cent in the last four weeks, data from property portal Zoopla shows.
These figures are the highest since 2023, when mortgage costs spiked after multiple Bank of England (BoE) interest rate increases, peaking at 5.25 per cent.
Estate agents told The i Paper that their own internal data shows that the number of sellers listing properties for sale is far higher than usual for this time of year but the number of buyers is far lower.
Experts say this is down to a combination of factors, including landlords selling up and a weak economy putting buyers off.
Lower mortgage rates can lead to house prices rising, as they mean buyers can afford to borrow bigger sums, but though the average two-year rate has moved from 4.97 per cent to 4.83 per cent in the last six months, according to Moneyfacts, more sellers than usual are over-pricing.
Richard Donnell, executive director at Zoopla, said: “We are in a buyer’s market, so some homes having price reductions to attract more demand are a regular occurrence.
“You can’t afford to be too optimistic with your sales pricing if you are serious about finding a buyer.”
Donnell said that house prices will likely rise at a rate of 1 to 2 per cent in 2026, which is well below the current inflation rate of 3 per cent.
Tom Bill, head of UK residential research at Knight Frank, said the estate agency’s data showed sale instructions were up 13 per cent in January when compared to the five-year average but the number of new prospective buyers was down 22 per cent.
“As the housing market recovers from the uncertainty of last year’s Budget, supply has been stronger than demand, which means many sellers have had to reduce their asking prices,” he said.
“Listings have been boosted by pent-up demand from before the Budget and a number of landlords attempting to sell due to red tape. Meanwhile, buyers have been more cautious as the economy remains weak.
“Demand will be boosted by falling mortgage rates but a [potential] Labour leadership contest will cause further hesitation all round.”
Patrick Bullick, managing director at Stanley Property, an estate agency based in London, said there was still a misconception that pricing higher was the best way to sell a property.
“Sellers always want to get the best price they can and most think asking a higher price is the way to achieve this.
“This is not true. In this modern era, buyers are harassed by the lower quality agents as soon as they register with them. So, most look on the property portal like Zoopla and Rightmove and only contact the agent if they think a property looks well priced, in their view.”
Property price indexes are showing a mixed bag of figures on house prices.HM Land Registry figures suggest that throughout 2025, property prices rose 2.4 per cent, which is slightly lower than inflation.
But between November and December, the same index shows prices dropped 0.7 per cent.
Zoopla’s index suggests prices rose by 1.3 per cent over the past year, but that while flat prices dropped 1.3 per cent, some types of houses saw bigger increases. Semi-detached prices rose 2.7 per cent, according to its figures.
The BoE is expected to cut interest rates later this year from their current level of 5.25 per cent but while this may lead to some small mortgage rate reductions, rates will not return to the levels seen in 2021 and before.
Growth projections are relatively weak, too, which could end up limiting the amount of disposable income people have to pay for properties.
The Government’s Budget watchdog, the Office for Budget Responsibility (OBR) said it forecasts growth of 1.4 per cent in 2026, while the average independent forecast is for growth of 1.1 per cent.
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