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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