Call for your free quote 0800 955 0058

Buyers negotiate harder as discounts to asking price increase

The gap between asking and selling price has increased across cities as home buyers negotiate harder on the property price.

Bigger discounts are negotiated by buyers according to the Cities House Price Index from Hometrack with average prices 3.8% lower than the asking price for the first quarter of 2019, up from 3.3% in the same period last year.

The gap between the asking and selling price has been increasing in all UK cities as price growth weakens with London the slowest with -0.5% for the year.

Larger discounts is good news for first time buyers as they would require a lower deposit or smaller mortgage to get on the property ladder.

With weakening city house price growth, it may be easier for remortgage buyers to stay in your existing home if you can and avoid the cost of moving.

Biggest discounts found in London

London has led the slowdown in UK house prices with the average discount to the asking price widening from 1% in 2016 increasing to 4.8% for 2018 and now 5.7%.

Inner London has seen the biggest asking and selling price gap with an average of 7.6% and in some boroughs it is double digits with outer London and commuter areas with average discounts of 5.1%.

The following table from Hometrack shows current house prices for regional cities and growth for the year to April 2019.
City Average house price Annual change
Glasgow £125,200 5.1%
Leicester £177,600 4.9%
Liverpool £122,200 4.9%
Manchester £169,700 4.5%
Nottingham £154,600 4.5%
Sheffield £138,700 4.4%
Birmingham £165,500 4.3%
Belfast £134,200 4.2%
Edinburgh £227,800 4.0%
Leeds £166,400 3.5%
Cardiff £207,700 3.1%
Newcastle £128,700 2.6%
Bristol £280,400 2.5%
Oxford £410,000 1.8%
Portsmouth £239,500 1.0%
Bournemouth £289,900 1.0%
Southampton £227,800 2.8%
Aberdeen £162,300 0.7%
Cambridge £424,400 -0.2%
London £482,900 -0.5%
The highest city growth rates are in the north of the country with Glasgow leading with house prices up 5.1% followed by Leister and Liverpool higher by 4.9% with Manchester and Nottingham rising 4.5% over the year.

Growth in the north of the country is from a low base with average property values in Glasgow at £125,200 and Leister at £177,600.

If you are a buy-to-let landlord with existing properties in North England and Scotland, the rise in house prices creates more equity which you can benefit from if you sell in the future.

For home movers leaving areas with high property values such as the South East to areas with lower values, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.

House price growth tracks earnings

In the long term house price growth tracks earnings which have stagnated in southern England and the slowdown is extending to the north of the country.

The fastest growing city in 2014 was London where house prices were rising at 18% per year and again with higher demand from investors to beat the stamp duty changes introduced in April 2016.

House prices in London remain the highest in the country by some margin averaging £482,900 and the considerable value in properties allows the equity release mortgage buyer to access money for home improvements and holidays of a lifetime.

There has been strong house price inflation relative to average earnings for the past 5-7 years supported by low mortgage rates increasing buying power for new purchases.

Mortgage rates bottomed out two years ago at 1.5% and affordability regulations have limited households ability to pay higher prices.

As lower mortgage rates are fully priced into the property market future house price inflation should track the growth in earnings in the long term as is happening in London and Hometrack is expecting sales volumes to tick upwards.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to gift to a family member or reduce inheritance tax owed by your beneficiaries.

Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

The latest mortgage news


25 Jun 2021

Seaside towns in Britain with house prices up 10pc due to strong demand

Demand for coastal living has seen house prices in Britain’s seaside towns rise 10% over the year as homeowners change their lifestyle.

24 Jun 2021

House prices at record levels with lack of property choice for buyers

Supply of properties on the market and available to buyers is an all-time low at the same time house prices are at record levels.

11 Jun 2021

Prices for house sales are rising four times faster than flats

Strong demand for houses has driven price growth up 5.2% in the last year which is over four times more than the 1.1% growth for flats.

28 May 2021

Fixed rate mortgage deals fall to under 1pc as lenders compete for borrowers

Fixed rate mortgages are cut to 0.99% for borrowers with large deposits looking to remortgage as competition increases from lenders.

Call for your free quote 0800 955 0058

  • IMPORTANT

    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

  • WARNING

    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.

    CONTACT

    Address:
    9th Floor, 30 Crown Place
    London, EC2A 4EB

    Phone:
    0800 955 0058

    Email:
    info@londoncitymortgages.co.uk

    London City Mortgages Limited is a registered company in England & Wales under company number 09278987. London City Mortgages Limited is an Appointed Representative (FCA no. 655965) of Blackstone Moregate Limited (FCA no. 459051) which is authorised and regulated by the Financial Conduct Authority. LCM and LCM Equity Release are trading names of London City Mortgages Limited.

    2021 © London City Mortgages.
    Website designed & developed by Spyre Media