UK house prices fell 1.2% to £264,600 on average in November compared to a year ago, as the housing market continues to adjust to higher mortgage rates through lower asking prices, data from Zoopla shows. 

Sellers accepted 5.5% off asking prices leading to an average discount of £18,000 — the largest gap for over five years, says the property website’s latest house price index. 

It adds: “The negotiating power of buyers is greatest in southern England where affordability is most stretched.” 

The average asking price discount for house sales is 6.1% across London and the South East, a £25,000 reduction. 

But the survey points out that “greater realism on pricing” has supported new home sales, which are 15% higher than a year ago and 5% up on 2019 levels, before the pandemic. 

It says the “chronic scarcity” of homes for sale over the pandemic, particularly for three-plus bed family houses, was a key driver of high house price inflation.  

This position has reversed with the highest number of homes for sale per estate agent for six years, with 34% more homes for sale than a year ago. 

The index adds: “Financial markets expect the Bank of England to start cutting rates around the summer of 2024.  

“If mortgage rates start to fall further, this will support an improvement in demand and sales volumes later in 2024 but prices will remain under modest downward pressure.” 

Propertymark chief executive Nathan Emerson points out: “We continue to witness an uncertain housing market in many regions with people remaining cautious on their approach.

“It is however reassuring to see inflation dipping back down and interest rates currently being held steady, although we must bear in mind that Andrew Bailey, Bank of England Governor, has hinted there will be no quick drops in base rate for the foreseeable future in order to keep inflation in check.”