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Asking prices come down as sellers get real

05 November 2010
Written by rosalind renshaw

The number of properties for sale in the UK that have had their asking price reduced at least once since coming to the market has climbed by more than 13% over the past three months.



The proportion of homes on the market that have had their prices cut is now 36.4%. 



The figures come from property portal Zoopla.

The site’s figures also show that the total value of the house price discounts has risen by almost £500m over the last three months as owners become more desperate to sell.

For those properties that have been reduced in price, the average discount currently stands at 6.1% (£15,879) of the original asking price, according to Zoopla, which has a feature on its website allowing users to hunt for bargains by sorting properties by how much the price has been reduced.



Of places seeing the highest number of asking price reductions, Swindon tops the list where half (49.5%) of all properties currently on the market for sale have been discounted by the seller from the original price. Norwich is in second place with 46.8% of properties having been reduced in price, followed closely by Bournemouth at 45.9%. 
 


The biggest average asking price reductions are currently to be found in Manchester where price reductions average 7.15%, followed by Newcastle (7.13%) and Milton Keynes (7.04%). 



At the other end of the scale, the lowest asking price movements are in Poole and Swindon, both down only 5.1%, followed closely by London where the average home has only been reduced in price by 5.2% since coming on to the market. 
 
At the top end of the market, for properties listed for sale at over £1m, the percentage of properties that have been reduced in price has grown by more than 26% over the past three months, up from 22.5% in August to 28.4% today.

The average discount in this price bracket now stands at 8%.

Comments

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    • 08 November 2010 17:24 PM
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    Thrifty housewife: Okay - reverse psychology is required here I think.

    Look at it this way: A property is 'worth' £200k - at which price, it should go under offer in, say, 4 weeks. Agent would have money (the Sale Fee) in the bank therefore in 12 weeks. Okay?

    Right. Agent therefore needs to assess a figure which would attract an offer of £200k, while not being too high and therefore frightening people away. Agreed?

    Result - a sale in the timescale stated above.

    Right. BUT - what if vendor of that property was prepared to wait, say, 12 weeks for a sale? 16 even? How much MIGHT you then achieve? £210k? £220k maybe?

    THIS is what an Agent's job is. A GOOD AGENT. Assessing the needs of the vendor and reacting accordingly by marketing the property at a figure which will bring the desired results.

    The Agent must put his/her own feelings, and needs, on the back burner. If they have to wait longer to get the Fee, then so be it. Waiting that bit longer MAY get their vendor more money - therefore covering not only the Agents' Fees but also the other costs of moving. (The Agent should benefit also, by an increased commission - but the figure is relatively negligible to what they COULD have achieved three or four months earlier...)

    99% of Agents, given the option, would love to plump for easy sales and quick turnaround. BUT, because they are paid by the vendor, to achieve the best result possible, they forego that utopian wish.

    Agents work first and foremost for the bill-payer - let's get that straight. Okay.

    If you know of one that doesn't, then DON'T use them to sell your property - BUY from them instead!

    • 08 November 2010 17:10 PM
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    IF prices did come down, a final offer would still very rarely meet a valuation.

    The buyer haggling their socks off (who blames them) is common practice in today's market.

    Prices are one aspect of the market, amongst many others. Prices coming down alone, is not enough for the market ro regain stability and have people meeting the listed price, or even exceeding it. Very few properties can command that in this market.

    Based on your theory that agents are "working for themselves" - what happens if they achieve a bumper price for a property? Oh yes, their client (THE SELLER) receives more money. It's in every seller's best interest for the agent to maximise the sale of the property.

    • 08 November 2010 15:06 PM
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    House prices would not need to be reduced if the original asking price was not so high in the first place. Therefore I do not consider houses for sale are now being Discounted to attract a buyer - they were grossly overpriced to begin with.

    In my opinion estate agents act for only one person - THEMSELVES!!!!

    • 07 November 2010 10:03 AM
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    Lol, not according to the last story on here Myra. Breaking news, prices are going up, breaking news prices are going down. What a load of tosh.

    • 06 November 2010 10:39 AM
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    Fact of life - It takes two to tango.

    In today's market, sensible buyers will always offer (usually way) short of the property's true value. Fact. Not many people are willing to buy a house for the actual listed value. Fact. (Why should they? There is a massive over-supply).

    Many agents and sellers brace themselves for this by listing the property a little ambitiously. They know they won't get this.

    I understand this practice - it helps prevent the seller taking even more of a battering in a tough market. Remember, the agent is working for the SELLER.

    • 05 November 2010 16:00 PM
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    Fair point, put in a bit of a ‘scary lady way’ but quite true.

    I cant do an oil change on a car, ive never needed to know how, my Dad can but he had to be able to years ago, nowadays we don’t need these skills and it’s the same with price reductions

    It seems that from about 1996 to the point Northern Rock fell over prices did nothing but climb, this has caused a skills gap in the industry where people just don’t know / haven’t needed to know how to get a meaningful price reduction.

    To have been in the job for 11 years is by no means inexperienced but many estate agents also don’t have a clue about vendor care so having the credibility and relationship with a vendor that enables you to achieve a needed and meaningful price reduction is way beyond many.

    Lucky thing is they’re all gonna get to learn now, so that’s nice

    Jonnie

    • 05 November 2010 15:35 PM
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    or are stupid agents that price to list rather than price to sell finally getting it? How many actually work out what the costs is to list a property??

    • 05 November 2010 13:28 PM
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