Tighter mortgage rules trigger house price discounts

Figures from the National Association of Estate Agents reveal that most houses changing hands on the British property market are currently selling at a discount, as tighter mortgage rules deter potential buyers.

In July, two thirds of those selling houses discounted their original asking price. This figure is up from May when fewer than half of those surveyed accepted a discount.

At the other end of the spectrum, only four per cent of homes sold for more than their asking price, down from nearly one in five, according to May's figures.

Managing Director of the NAEA, Mark Hayward, said that the current trend for sellers slashing the asking price of their property is a positive sign, arguing that it signals an appetite for movement in the market, and is also good news for home buyers.

The trend is also expected to have an impact on future rates of house-price growth, particularly in London.

According to Estate Agency Savills, London buyers will face affordability issues, and as a result the London housing market will see growth of 5% in 2015, and no growth at all the following year. This is down from 6 and 4 per cent in last year's forecasts.

Lucian Cook, residential research director at Savils said the property market is cooling down due to the combination of potential interest rate rises, and limits on mortgage lending.

If you are buying or selling a house, our property lawyers can help. Call us on 01625 522 429 or email info@richardsonlaw.org.uk for more information.
 

Richardson Law

Wilmslow Conveyancing Solicitors