Third of property sellers forced to cut asking price

Third of property sellers forced to cut asking price

More than a third of sellers have dropped their asking price in the biggest spate of reductions for five years, according to Rightmove.

The property website, which claims to list 90 per cent of the houses being sold in the UK, revealed 37 per cent of sellers had dropped their asking price in October.

It also cautioned that those who had recently put their properties up for sale were being overly optimistic by failing to make further cuts.

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The 0.8 per cent average price reduction – equivalent to £2,392 – is the smallest Rightmove has recorded in November since 2007, at the beginning of the credit crunch.

A drop in new seller asking prices is the norm at this time of year in the run-up to Christmas.

However, with the largest proportion since 2012 of existing sellers at this time of year who have reduced their initial asking prices, it seems many of this month’s new sellers are being too optimistic by not discounting by a greater factor than 0.8 per cent, the Rightmove report said.

An analysis of properties sold last month after having had their prices cut shows that the average reduction between initial and last advertised asking price was 6.3 per cent.

Rightmove director Miles Shipside said some sellers and their agents were over-pricing.

“These sellers may well be asking themselves if they could have saved some time and stress by pricing a lot more conservatively than an average of more than 6 per cent ahead of what the market subsequently proved it could sustain,” he added.

The Rightmove data adds to evidence of a significant slowdown in the housing market, which has been particularly pronounced in the capital.

Estate agent Your Move’s latest index reveals annual house price growth slumped to a five-year low in October, with London seeing a 2.4 per cent year-on-year decline,while HMRC figures show transactions fell in September after successive months of slowing growth.

According to Halifax, confidence in the housing market has fallen to a five-year low amid growing concerns about the UK’s economic outlook.

Mr Shipside said the Bank of England’s decision to raise the base rate of interest from its historic low of 0.25 per cent had also dampened market sentiment.

He said: “With guidance that the upper limit for now may well be around 1 per cent, buyers who are disappointed that rates are on the up after a ten-year break should note they are still historically very cheap. 

“Sensible pricing by more sellers, bearing in mind the stretched buyer affordability, could help buyers’ mood.”

Founder and chief executive of Russell Quirk commented: "No huge surprise that we are seeing a large proportion of properties reducing asking prices as we head into the quieter festive period, especially given the current market conditions. 

“It is always recommended that sellers price their house appropriately based on the current market climate, particularly with the slowdown in price growth we have seen of late.