Estate agents and property sellers are listing properties at far higher prices than they are ultimately selling for, with the average home taking a price cut of nearly 10 per cent. 

Agent Knight Frank says sellers are having to accept big discounts amid higher mortgage rates and a glut of homes on the market.

Properties that saw contracts exchanged between July and September sold for an average 90.6 per cent of their initial asking price, Knight Frank's data showed.

It means a home initially listed for £300,000 is selling for £271,800, while properties going on the market for £500,000 are selling at £453,000. 

Buying agents report they are securing discounts as big as 26 per cent below the asking price with small flats, new builds and former buy-to-lets being ripe for a bargain with sellers having to discount heavily to get buyers through the door. 

Jo Eccles, founder and managing director of prime London buying agency, Eccord says that some sellers are also simply listing far too high.

'We achieved a discount of 26 per cent recently on a house in southwest London,' says Eccles. 

'In overpricing to begin with and sitting on the market for some time, the seller was on the back foot and we were able to capitalise.'

It marks a significant change from the market in 2021 and 2022, when demand was fuelled by the pandemic-era stamp duty holiday, the 'race for space' and cheaper mortgages.

Between July and September 2022, sellers achieved 100 per cent of the initial asking prices on average, according to Knight Frank. 

Expensive homes see biggest discounts

The top end of the property market is struggling at the moment. 

Properties priced at £2million and above are half as likely to sell as those below £2million, take twice as long to secure a buyer, and sell with an average discount of almost £250,000, TwentyCi data revealed this month. 

Price reductions on prime properties, especially in London, tend to be the biggest, according to Jonathan Hopper of buying agents Garrington Property Finders.

Fewer than four in ten homes listed in London found a buyer between July and September, according to Garrington's analysis. 

In the capital's £1million-plus postcodes, there were 3.6 homes listed for sale for every one that sold and only 28 per cent of homes found a buyer over the same three-month period.

It also found that for every 100 sales agreed, 62 homes were withdrawn from the market, double the national rate – suggesting that many sellers just gave up. 

Hopper says: 'These figures capture well just how hard things are for sellers at the premium end of the market.

'Rather than seeing their home sit unsold, sellers often face an awkward choice between coming off the market or slashing the price.'

Hopper says they're also seeing the emergence of a 'discount two-step' among sellers in southern England. 

This is where they make a first price cut to attract interest and drum up viewings, and then agree to a further reduction during negotiations with the buyer. 

Why do homes get over-valued? 

Sellers want to get the best possible price for their property. This can result in some trying their luck by listing with an overly ambitious asking price.

In some cases estate agents feel they have little choice but to agree, or risk losing the instruction.

However, some agents have been known to over-value homes in order to win over sellers, often in the hope that they can persuade them to reduce it to a more realistic level later.

Buying agent Jo Eccles says: 'This is a really tricky market to navigate, because a discount from the asking price set by the seller or their agent isn't necessarily a discount from the true value.

'In some cases, sellers are setting the asking price to try and recoup what they paid for the property, plus stamp duty and any works carried out during their ownership. 

'In other cases, selling agents are overpricing properties to win instructions over their competitors. In both these scenarios, the asking price is not a true representation of market value today.'

How to haggle off the asking price: Top tips 

Buyers in locations where properties are struggling to sell can feel more confident in offering significantly under the asking price without offending the seller.

The seller and their estate agent are likely to be short of interest and this creates the perfect opportunity to buy at a discount.

It's worth understanding what buyer demand and house prices are doing in a local area, rather than focusing on the county or country as a whole.

There may still be strong buyer demand or a lack of good quality homes for sale in a specific area, for example.

Buyers shouldn't assume they can pluck a figure out of the air and expect the seller to knock it off the price, according to buying agent Jonathan Hopper.

'Asking prices are a seller's aspiration and a starting point for negotiations. Smart buyers will do their homework to get a handle on how realistic the asking price is, and to figure out the seller's motivation,' he says.

'Understanding these two things will help you calibrate an offer the seller is likely to accept, even if it is below their asking price.'

Hopper suggests the two key tell-tales buyers should look out for are any signs of the seller being in a hurry or if they have been struggling to get serious offers. 

'If offers have been rejected, try to find out why,' Hopper adds. 'If no offers have been made, especially for a while, the seller may be getting anxious and this will give you the maximum chance of success if you're serious and have all your financial ducks in a row'.

Jo Eccles suggests buyers make sure they're in a position where they can actually proceed before they try to negotiate.

'Present your offer with as much detail as possible in terms of who you are and why you're buying the property, as well as practical information such as who your solicitor and mortgage lender is, your financial position and preferred timescales for exchange and completion,' she advises. 

Eccles thinks buyers should avoid debating with the estate agent about what they think the property is worth or bringing in examples of other sold homes to argue their point. 

She adds: 'My advice would be to present your offer with tact and not get drawn into a potentially insulting debate about what the property is worth.

'It erodes goodwill from the transaction and reduces it simply to facts and figures, comparables and price statistics, rather than getting across the emotion behind your offer. 

'This reduces your likeability and the seller may also suspect you will behave badly through the purchase process or find ways to chip the price later on.

'Sellers are very sensitive, as so many of them are selling for a loss, so coming across as an aggressive or know-it-all buyer won't win you any favours. 

'A seller or agent is much more likely to trust you if you say, 'This is as far as I can stretch and I appreciate it might not be what you're looking for, but I will be an upstanding and committed buyer.'