The average drop in the United Kingdom (UK) for property sellers’ asking prices in August was 1.1% in the last 10 years before Rightmove reported its numbers for 2012. The 2.4% drop experienced this year has property analysts casting about for a clue as to what may have caused such a dramatic downward shift. One theory is that the Olympics and flagging economy acted to draw buyers’ attention away from the housing market, thereby forcing sellers to work harder to gain it back. Another theory is that agents are valuing homes lower, but it still does little to explain why sellers would ask for so much less. For more on this continue reading the following article from Property Wire.
New sellers’ in the UK dropped asking prices by an average of 2.4%, taking the average price to £236,260, according to the latest figures from Rightmove.
It is the largest August fall Rightmove has ever recorded and follows a fall of 1.7% n July, but prices are still 2% up on a year ago. The firm says that the Olympics did not deter new sellers from coming to market during August, with numbers marginally up on the same period a year ago, although asking prices have been adversely affected.
It also said that sellers who come to market in the middle of the summer holiday season often have an urgent reason to sell and traditionally set their asking prices aggressively lower. However, a 2.4% drop amounts to 5,837 and is substantial compared to the average fall of 1.1% measured in August over the last 10 years. The firm reckons that with buyers distracted by sport and the economic backdrop, sellers will now have to compete hard to win their attention in the upcoming autumn selling season in order to move before Christmas.
‘The Olympics may have focused the nations attention on sporting goals in the last month, but for over 120,000 new sellers their goal was to sell their property. One would perhaps expect some sellers to have postponed their marketing plans until after the Olympic distractions, though with more people working from home it may have given them an opportunity to begin their property move a few weeks earlier in readiness for the hoped for upturn in buyer activity in the lead up to Christmas,’ said Miles Shipside, Rightmove director and housing market analyst.
The number of new sellers is slightly up on the same period last year, though perhaps as a reflection of their urgency to sell, or to compensate for the distraction of the achievements served up by Team GB, they have dropped their asking prices more aggressively than summer sellers in previous years,? he added. Rightmove measured 127,992 properties coming to market this month, up by 0.4% on August 2011.
With many estate agents reporting a slow summer sales market, the large monthly fall of 2.4% in new seller asking prices is also a sign of some reticence by estate agents to put property on the market at higher prices, especially when existing stock for sale is failing to attract serious buyer interest.
All regions of the country recorded month on month price falls for the first time since November 2011. ‘Estate agents are always aiming to win new seller instructions, but if what’s already on the market isn’t shifting then the best advice they can give to potential new sellers is to undercut those properties already failing to sell,’ explained Shipside.
With a few more summer sellers around, it seems agents are being a bit blunter on valuations in local markets where summer buyers are scarce. With the average time on the market being 92 days, any seller coming to market and hoping to move before Christmas needs to get their skates on to tempt a buyer who can proceed. ‘It is possible that they may be assisted by the Bank of England’s Funding for Lending scheme, which may lead to greater mortgage availability at more competitive rates,’ he added.
Shipside pointed out that there are currently many market challenges for sellers to overcome if they want to sell this autumn. ‘Engaging a buyer by making your property too compelling to resist will be critical to success. A sellers property is competing against other properties for sale, and whilst it may never engage a buyer’s attention to the same extent as a top Olympic event, your property has its own competitors all striving to engage an audience,’ he said.
This article was republished with permission from Property Wire.