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Asking prices cut by 5 per cent but homes still fail to sell
Mira Bar-Hillel, Property Correspondent17 Nov 2008
LONDON homeowners are lowering their asking prices by more than five per cent but it is not enough, a report shows today.
New sellers have reduced asking prices by an average 5.4 per cent compared with a year ago, website Rightmove said.
However, agents said that sales were being agreed at about 20per cent lower than last November.
The gap between the two is causing many sales to fail, as sellers refuse to accept low offers. Rightmove's commercial director Miles Shipside said: "Some sellers could avoid months of frustration and despair if they started marketing at an asking price a lot closer to where the evidence indicates they are likely to end up.
"In many parts of the capital asking prices should be much, much lower than they are.
"Not all sellers will be willing to consider it, especially those struggling with negative equity. However, those that do will increase their chances of selling more quickly and could cut out the months of asking price reductions to get to the 'buyer friendly' price that they could have started with."
The average time a property stays on the market has fallen slightly - but this is not because of quicker sales but because more properties are being withdrawn because of lack of interest.
Some sellers have also been deterred by the need for an Energy Performance Certificate, costing about £300. Mr Shipside said: "All the woes that are affecting the property market are compounding each other, making it a tough Christmas for those who have to sell but giving opportunities to those looking to buy.
"There will be a few real bargains snapped up in the darker evenings leading up to the new year."
The fall in sales numbers, thought to be reaching up to 70 per cent in parts of London, has also caused hundreds of estate agents to disappear every month. Rightmove has between 80 per cent and 90 per cent of homes for sale advertised on its website but is feeling the pinch.
Last month it axed 60 of its 300-strong workforce, as users of its website fell from 12,600 a year ago to 10,700 now. Almost 1,200 quit the site since July and the situation is predicted to get worse.
Rightmove said at least three out of every four agents who have left have gone bust or were removed for failing to keep up with membership fees.
Reader views (10)
Prices need to come down considerably before the market starts moving again. It will be very hard to get any kind of mortgage at the moment (unless you have a HUGE deposit) becuase the banks know prices will fall even further, so they are not going to lend money to buy something that will drop in value. Prices are not being dropped because a) people are greedy OR b) they bought the property in the last 5 years and paid over the odds...therefore they are trying to avoid losing money.
- David H, London, 18/11/2008 11:23
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Well I wont be going back to London until its 50 percent which may take a few years but it will be worth the wait.
- Brian Fast, Sydney Australia, 18/11/2008 10:02
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Raminder - you must be mad! Why would you spend more when you didn't have to?! You must have lots of money to spare. I don't know anyone else who'd do that!
- Ms, London, 17/11/2008 22:50
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Raminder, it's refreshing to see someone ethical and not greedy. Many years ago my father did the same thing. It was a life-saver for the vendor who was desperate. Your generosity helps make the world a better place.
- Judet, Melbourne Australia, 17/11/2008 22:15
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Big deal 5% is still not a bargain. Be realistic and not greedy.
- Elizabeth Thornton, London and France, 17/11/2008 15:53
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I have just bought a repossession property - a 1 bed flat close to isle worth train station for 148k, I could have got it for 135k, but offered 148k, since that is what the previous buy has paid for it back in 2003, so I was uncomfortable about going any lower. However this gives you an indication of how far prices have already fallen!
- Raminder Bhalla, Northolt, 17/11/2008 14:20
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I used to live in London and sold my flat 4 years ago to move back up north. Even back then, I accepted an offer which was 5% less than my asking price, because I realised prices were inflated unrealistically, and I just needed enough to clear my mortgage and buy a property here. I think sellers these days need to either sit tight or move out and rent their property, or reduce their prices to a realistic level, and that's much more than 5-10%. 20-30% would be more realistic. Mortgage lenders just aren't lending unless buyers have a hefty deposit ready.
- Yvonne, Doncaster, UK, 17/11/2008 12:37
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It is time for people to get real!!!!!!
House prices will fall by at least another 40% by Christmas 2009.
This idiotic government, who caused the housing problem in the first place, is still trying to get people to borrow & spend when all sensible people will be putting up the shutters!!!!!
- Richard (Retired Property Developer), London England, 17/11/2008 11:51
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London houses are 30% overvalued so knocking-off 5% won't help selling. Sellers have to be realistic now.
- John, London, UK, 17/11/2008 11:47
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Sellers should try discounts of 15-20%. Then they may get some interest and offers!
- Martin, London UK, 17/11/2008 10:42
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