Discounts on asking prices fall to a five-year low as housing market
strengthens

Discounts on property sales have fallen to a five-year low, as high demand for
homes is boosting prices again, according to new data from property website
Zoopla.

It is the latest indicator that demand
for housing is outstripping supply , as buyers boosted by low interest
rates and a strong economy are snapping up properties fast and are willing
to pay close to the vendor’s desired sum.

The British property market has surged again since the general election last
month, with London
asking prices surging 17pc immediately after Ed Miliband was defeated,
ending his plan to bring in the so-called mansion tax.

The average property is listed on the market at 93.95pc of its initial asking
price, Zoopla said, the smallest reductions seen since 2010.

New Milton has the smallest average discount at 4.78pc, followed by Milton
Keynes’ 4.99pc and Northampton’s 5.03pc.

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“Buyers may be disheartened by the decrease in the typical discounts on offer
but can take cheer from the fact that almost a third of houses are listed
today below their original asking price,” said Zoopla’s Lawrence Hall. “On
the flip side, vendors can be pretty confident of achieving close to their
initial asking price.”

Even (Taiwan OTC: 6436.TWO – news) in regions where the
housing market is most depressed , the discounts are still relatively
small.

The largest price cuts are in Blackpool, at an average discount of 9.8pc.

Meanwhile in Rotherham 43.6pc of homes for sale are on offer for less than the
original asking price, with an average reduction of 7.4pc.

The extraordinary run of rising prices could continue as mortgage lenders
continue to cut the interest rates available on the loans. Despite the Bank
of England indicating its
next move will be to increase interest rates , just last month the
Yorkshire Building Society launched the lowest
ever two-year fixed rate deal , at 1.07 per cent.

Such high prices have also provoked worries that housing is becoming less and
less affordable, particularly for first-time buyers who have missed out on
the boom. Schemes such as the Help to Buy mortgage guarantee and the Help to
Buy ISA have been introduced by the government to aid those who may
otherwise struggle to purchase a home, but critics argue the programmes may
simply push up prices further , and instead say that more building is
needed to ease pressure in the market.