Asking prices rise as housesellers ignore market realities

| March 25, 2008 | 0 Comments

Rightmove has reported that in March, the average asking price of a UK home rose 0.8%, or £1,799, to £239,655.

The property website’s commercial director, Miles Shipside, believes that new vendors are ignoring market realities and that if they continue to do so the market could stagnate.

With levels of unsold properties high, competition between vendors is strong. In addition, many first-time buyers are now finding it extremely difficult to obtain a mortgage.

Mr Shipside is urging sellers to be realistic, pointing out that if they can achieve interest in a property now, they could avoid a price drop later in the year.

He explains: “Prices tend to overshoot in a boom and readjust over time. With sellers still launching their properties onto the market at close to peak figures, it is likely we are in the midst of such an overshoot. Whilst sellers are dropping their prices after a few weeks after no interest from buyers, the gap between a seller’s initial price and a buyer’s ability to pay appears, paradoxically, to be widening.”

Average unsold property stock per estate agency branch has risen to 67 from 56 at this time last year (and from 64 in February).

However, a decline in the usual level of new listings (largely as a result of the cost of Home Information Packs and a cutback in the number of new homes) should help prevent the excessive over supply that can cause a property market crash.

According to Rightmove, the length of time taken to sell a property has fallen from 93 to 82 days in the past month, indicating that there is a positive base of activity for those willing to market at a competitive price.

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