Brexit sparks increase in price reductions on homes for sale, says Zoopla

A third of sellers cut prices by an average £25,000 but discounts 'not as high' as expected.

There was a rise in the proportion of properties listed for sale having their asking prices slashed in the aftermath of the EU referendum, in which voters backed Brexit. Zoopla, a property listings website, said its data shows nearly 33% of its homes for sale had their asking prices cut in July, the month following the referendum, a 1.49% increase.

Since April, this is a near 4% rise as EU worries gripped the market. But the average value of the asking price reduction has fallen by just 0.56% since April to £25,257.

"The total number of properties on the market with a reduction has risen since April, but discounts are way off their peak and not as high as one might have predicted given the EU referendum outcome," said Zoopla's Lawrence Hall.

Brexit has created political and economic uncertainty. The terms on which the UK will leave the European Union (EU), and its future relationship with the single market, are yet to be negotiated.

As a consequence, many investment decisions are being delayed or dropped, sparking fears of a recession. The Bank of England has already slashed interest rates and boosted its stimulus.

A Treasury analysis of Brexit, released prior to the vote, suggested that house prices would crash by as much as 18% in the event of a severe economic shock. But any Brexit-related economic slowdown is expected to be modest and not on the scale of the recession during the financial crisis. Moreover, cheap mortgage credit and a fundamental lack of housing supply should help underpin house prices.

Top 10 areas with highest proportion of asking price reductions

Rank	Area	% of Homes on Market Reduced	Average Price Reduction (%)	Average Price Reduction (£)
1	Huddersfield	44.91 %	6.72 %	£14,030
2	Wigan	43.86%	6.69 %	£10,920
3	St Helens	43.30%	7.05%	£9,425
4	Middlesbrough	42.63 %	6.74%	£11,852
5	Wirral	42.45%	6.55%	£16,113
6	Great Yarmouth	40.93%	7.88%	£16,690
7	Halifax	40.76%	8.31%	£15,554
8	Bishop Auckland	40.28%	10.09%	£14,423
9	Rotherham	40.20%	7.13%	£10,984
10	Stockton-on-Tees	40.06%	7.80%	£13,277

Top 10 areas with biggest reductions in asking prices

Rank	Area	Average Price Reduction	Average Price Reduction (£)	% of Homes on Market Reduced
1	Bishop Auckland	10.09%	£14,423	40.28%
2	Haverfordwest	9.38%	£23,292	37.88%
3	Durham	9.13%	£14,977	37.42%
4	Blackpool	8.85%	£13,562	38.01%
5	Poole	8.66%	£58,668	28.27%
6	Oxford	8.40%	£38,067	33.15%
7	Halifax	8.31%	£15,554	40.76%
8	Great Yarmouth	7.88%	£16,690	40.93%
9	Darlington	7.86%	£12,547	39.22%
10	Bradford	7.85%	£11,278	35.10%

Top 10 London boroughs with largest asking price reductions

Rank	Area	Average Price Reduction (%)	Average Price Reduction (£)	% of Homes on Market Reduced
1	Kensington and Chelsea	9.24%	£156,996	35.19%
2	Westminster	8.40%	£137,999	32.20%
3	Hounslow	8.27%	£61,427	32.65%
4	Barnet	7.73%	£74,417	29.11%
5	Hammersmith and Fulham	7.72%	£82,839	34.45%
6	Haringey	7.68%	£63,013	27.06%
7	Wandsworth	7.65%	£87,155	32.98%
8	City of London	7.40%	£66,420	29.05%
9	Ealing	7.37%	£51,906	32.92%
10	Croydon	7.30%	£34,453	31.90%

Top 10 London boroughs with highest proportion of asking price reductions

Rank	Area	% of Homes on Market Reduced	Average Price Reduction (%)	Average Price Reduction (£)
1	Kingston upon Thames	35.35%	6.63%	£54,676
2	Kensington and Chelsea	35.19%	9.24%	£156,996
3	Hillingdon	34.95%	7.07%	£39,282
4	Richmond upon Thames	34.95%	6.90%	£54,484
5	Merton	34.83%	7.17%	£50,531
6	Hammersmith and Fulham	34.45%	7.72%	£82,839
7	Harrow	33.21%	6.31%	£35,866
8	Wandsworth	32.98%	7.65%	£87,155
9	Ealing	32.92%	7.37%	£51,906
10	Hounslow	32.65%	8.27%	£61,427

Source: Zoopla, July 2016

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