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Two In Five Home Sellers Forced To Cut Asking Prices As Reality Bites

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Two in five home sellers forced to cut asking prices as reality bites

By Simon Lambert

15th August 2011

Two in five properties currently up for sale have had their asking prices cut at least once, a new report has revealed, as home buyers play the waiting game.

Buyers taking advantage of the continuing slump in home sales to test sellers’ resolve are seeing their strategy pay off – with the average price reduction of £18,500 shaving 7.1% off the original asking price.

The 38.6% of properties sitting on estate agents’ books that have had their prices cut is up from 37% three months ago and 32% a year ago.

The research by property listing website Zoopla.co.uk shows that even Millionaires’ Row is not immune from the buyers’ market – with 27% of all £1 million-plus homes on the market having had their asking price cut.

This is up from the 25% three months ago and 22% a year ago that had seen cuts.


On sale: Homes are seeing their prices cut as buyers play the waiting game

The cuts come as many initially over optimistic home sellers find that they must lower their expectations if they actually want to sell up.

Nicholas Leeming, of Zoopla.co.uk, said: ‘Vendors continue to have to lower prices due to weak buyer demand. Sluggish economic growth has hit buyer confidence and tight-fisted lenders are currently making it impossible for swathes of would-be buyers to benefit from the price reductions.

‘For those who can get mortgages, now is as good a time as there has been in over a year to bag a property bargain.’

The gap between sellers’ ambitions and buyers’ realistic purchasing power has been repeatedly highlighted in the Royal Institution of Chartered Surveyors’ monthly house price reports, compiled from its member estate agents’ experiences.

Typical of many comments in the most recent RICS report for July, John Frost, of The Frost Partnership in Beaconsfield, Buckinghamshire, said: 'If property is priced sensibly there is still strong interest. Those vendors who are not realistic will receive little interest in this market place.'

This attitude from sellers has been reflected in asking prices managing to consistently rise year-on-year, on the Rightmove index, while at the same time falling annually on major house price reports from the Land Registry, Halifax and Nationwide.

However, there are suggestions from agents that sellers may be becoming more realistic as economic reality bites and the latest Rightmove survey for the four weeks to the middle of August has actually shown a slight annual dip in asking prices.

It showed that August’s sellers dropped average asking prices by 2.1% (£5,054), and year-on-year prices edge down for the first time since September 2009 (-0.3%)

However, the report added that despite transactions having slumped and mortgages become much harder to get, in the four years since the onset of the financial crisis asking prices have fallen by only 4.1% (£9,930).

Where are prices being cut?

Northern towns and cities lead the table of places with the highest average price reductions.

Zoopla says Bolton sellers are suffering the most, having been forced to reduce the original asking price by 8.6% on average. Glasgow (8.2%) and Newcastle-upon-Tyne (8.2%) complete the top three, while other major northern cities like Liverpool are also in the top ten.

Conversely, prices in the South East have remained more immune to reductions where properties in Chelmsford (5.5%) have the lowest average discount and the list also includes other prominent south-east areas like London (6.3%) and Croydon (5.6%).

London has the lowest proportion of price-reduced homes in the UK (32.4%). In Stockport, nearly half (47.8%) of all properties for sale have been reduced in price since coming onto the market, closely followed by Huddersfield (46.3%) and Chesterfield (45.8%).

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Strictly speaking, its not 2 in 5 home 'sellers' as the other 3 in 5 are unlikely to actually sell.

I was going to say much the same thing.

Almost every property that I see is initially 10-20% overpriced.

Some stay at that price and never sell.

Some are slowly reduced down to the "right" price before selling.

And just a very few find some stupid mug to pay the overpriced price.


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'tis an interesting philosophical ponderance. You're right of course.

A home seller is like a race winner- you only know them to be so after the event has taken place.

All these housing stats that look at pre-sale figures are riddled with survivorship bias and many of the post-sale ones are too (e.g. Haliwide only cover purchases by people that fit their mortgage criteria).

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