Nearly half of the people selling their homes were forced to cut their prices by more than 5% over the last month thanks to mortgage mayhem.
Buyers are negotiating lower asking prices as they struggle to prove they can afford a mortgage after the Bank of England hiked interest rates to 5% last week.
Data from real estate company Zoopla said roughly 15% of sellers accepted at least 10% off their initial asking price, with discounting at its most widespread since 2018.
House prices rose by 1.2% in May year-on-year, Zoopla said, although they are expected to decline by as much as 5% over 2023 as momentum slows.
Aside from weaker economic growth, Zoopla warned that a surge in the supply of homes could also drive down house prices.
Signs are starting to appear that supply is growing above average, with 18% more homes listed for sale in the last four weeks compared to the five-year average.
Zoopla added that the buyers’ market is expected to strengthen in the second half, with data indicating that agreed sales are 8% above the five-year average, even though there are 14% fewer buyers in the market.