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Dave Beans

Seven Percent - The Average Discount Issued On A House Price

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Not sure if this has already been covered...(probably has)..

http://www.dailymail.co.uk/news/article-1385476/House-prices-continue-fall-lack-mortgage-finance-holding-buyers.html

More than a third of home sellers forced to slash asking price by up to £20,000

The number of home sellers who have reduced their asking price at least once has risen to 37 per cent. According to property website Zoopla, home-owners are being forced into making discounts of an average of £18,970, or seven per cent. The group said it was the biggest discount to asking prices it had recorded for more than a year, and £2,500 more than the amount frustrated sellers knocked off their original price last summer.

There is a marked north/south divide, with sellers in northern regions reducing their prices more often and by more than those in the South.

Nine out of the top 10 areas which have seen the biggest reductions are in the north, with Bolton leading the way, with average reductions of 8.5 per cent, followed by Rotherham at 8.4 per cent, and Newcastle and Huddersfield, both at 8.2 per cent.

In Doncaster 46 per cent of properties on the market have had their price reduced at least once, as have 45 per cent of homes in Wolverhampton, and 43 per cent in Stockport, Birmingham and Chelmsford. At the other end of the scale, only 29 per cent of sellers in Chorley in Lancashire have altered their original price, while those in Croydon have made the lowest reductions at an average of just six per cent.

House prices across Britain continued to fall slightly in April as sellers put their homes on the market, but demand from buyers stayed the same new research shows.

The number of houses for sale increased last month as home-owners embraced the traditionally busy spring period to put their property on the market, according to the Royal Institution of Chartered Surveyors. Eighteen per cent of estate agents reported a rise rather than a fall in new instructions - up from just four per cent more who saw a rise in March - as tentative signs that property prices may have stabilised also acted as a trigger to sellers. Demand from potential buyers also showed signs of improving, as the good weather led to an increased number of viewing in many parts of the UK.

But despite the number of property surveyors reporting a fall in interest from potential buyers being matched by those who saw a rise, lifting the balance of new enquiries out of negative territory for the first time in 10 months, the group said a lack of mortgage finance was still holding many people back.

It added that only those who were cash-rich were really able to take advantage of the current market. Michael Newey, RICS housing spokesman, said: 'The return of sellers to the market is positive, but activity still remains subdued and it is difficult to see it picking up materially over the coming months.

'Although there are signs that some lenders may be reducing their grip on the purse strings, in particular with mortgages aimed at first-time buyers, there is still a long way to go before lending levels increase enough to have any real impact.

'Economic uncertainty may also continue to weigh on sentiment for a while to come.'

The ongoing mis-match between supply and demand continued to put pressure on prices, with 21 per cent more surveyors reporting price falls than those who saw rises, although this was the lowest level since June last year and 82 per cent of surveyors reported falls of between 0 per cent and 2 per cent.

House prices are expected to continue falling going forward, with a balance of 18 per cent of surveyors predicting further drops.

But they were more upbeat about sales, with 11 per cent more surveyors expecting the number of homes changing hands to increase, than those who thought they would fall.

This followed a rise in the average number of sales agreed per chartered surveyor estate agent to 15.2 during the three months to the end of April, although this was still well down on the long-term average of 26.5.

London continued to buck the national trend, with surveyors in the capital reporting price rises, while those in all other areas of the country saw falls.

The research comes the day after Halifax said house prices had fallen by 1.4 per cent during April, although Nationwide reported a more moderate decline of 0.2 per cent for the same month.

Ed Stansfield, chief property economist at Capital Economics, said: 'The slight moderation in the pace of house prices falls, reported by the RICS in April, remains heavily dependent on developments in London, and it does little to change the picture of a very depressed and fragile market.

'There is little evidence that mortgage market conditions are easing. In any case, consumer confidence has been depressed by the uncertain economic outlook and the growing squeeze on household incomes.

'Both factors suggest that the downwards pressure on house prices is likely to build as the year progresses. We expect house prices to fall 5% in 2011 and to continue falling in 2012.'

Edited by Dave Beans

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I read this as 7% is the average reduction observable in asking prices, as opposed to the average amount that sellers have to discount their asking prices by in order to achieve sales. Am I right?

Edited by Tricksy

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I read this as 7% is the average reduction observable in asking prices, as opposed to the average amount that sellers have to discount their asking prices by in order to achieve sales. Am I right?

I can't make out from this bit of journalistic rubbish which one of these it means. It seems very ambiguous.

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Chelmsford 43% reduce prices and the other 57% "can't sell" I can't remember the last time I saw a house SSTC that had not at some point had a reduction.

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I read this as 7% is the average reduction observable in asking prices, as opposed to the average amount that sellers have to discount their asking prices by in order to achieve sales. Am I right?

Correct. Zoopla are just advertising the houses, and report what people are reducing their asking prices by.. They have no information on the price the house actually sold for.

So in fact, 7% is the tip of the iceberg, since we also know that in other reports houses are fetching 92% of the asking price.

You could argue therefore they're taking a 14.5% drop (assuming the same people dropping their asking prices are also taking 92% of the new asking price)

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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