New sellers have chopped their asking prices by 1.7% – the largest monthly cut in a July for four years, Rightmove said this morning.
The average asking price for a newly listed property on the site is now £242,097, which is an average of £4,138 down on last month. Despite the monthly drop, it is 2.3% higher than last July.
Even in seemingly unstoppable London, asking prices have fallen – by 3.6% since June, to stand at £460,304, down from £477,440.
The cut has come with new sellers outnumbering successful buyers by nearly two to one, highlighting the challenge faced in the sales market.
Even in London, new sellers have gone up by 6%, indicating an increased willingness to sell – ‘unusual timing in the quieter summer months’, Rightmove says. It suggests that Stamp Duty increases in the Budget may be a factor.
Rightmove director Miles Shipside said that with buyers thin on the ground, sellers would have to be clear on what it would take to make their property a compelling buy.
He said unsold stock levels remain ‘stubbornly high’ at 75 per estate agency branch.
He said stock levels have risen for the last five consecutive months, as new seller numbers outstrip the number of properties sold or taken off the market.
Getting on for half of all properties on the market over the last year have not sold. The Land Registry data for the last 12 complete months for which it has data available shows average sales completions at 56,200 per month. Rightmove, which claims to list 90% of the market, has been listing an average of 102,121 per month over the same period.
During the 12 months before the credit crunch, average monthly new property supply was 137,082, outstripping seller numbers of 108,539 by just 25%.
Shipside said: “Even though the supply of new properties coming to market remains constrained compared to pre-credit crunch levels, in all but the most stock-starved micro-markets, seller levels substantially outnumber those of proceedable buyers.
“The fact that we have not seen major price falls in the UK and that many areas are not awash with agents’ For Sale boards may lead some sellers to be over-optimistic with their pricing, but it is vital that they are dispassionate and face up to what they have to do to get their property fit to sell.
“New seller numbers may be 30% down on the period prior to the credit crunch, but the numbers achieving a successful sale are down by half and average unsold stock levels are creeping up.
“Sellers need to adjust, as this new world is the new norm.”
Research into buyer behaviour on Rightmove shows that potential buyers spend just 2.7 seconds looking at a summary advert before deciding whether to take their interest further, or move on.
Shipside said that given that a property advert has under three seconds to make a positive impression, sellers need to find the perfect combination of right price, compelling photographs and alluring description.
He said sellers needed to be aware of the three key Ps – Price, Presentation and Promotion.
The average asking price on Rightmove is still far higher than actual selling prices – £162,417 according to Halifax, £165,738 according to Nationwide, and £161,677 (for May) according to the Land Registry.
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Comments
Jonnie, good question; why are the majority of us malcontents male?
I presume due to it being an economics-led forum which is all rather dry and boring. Plus, it ain't Mumsnet over yon; you can receive a textual kicking, from far greater egg-heads, for the slightest thing so you need to be able to hold yer own.
Anyhoo, i've lost my mojo of late so i'll probably go into hibernation until this running and jumping cr*p is out of the way.
Enjoy the rain y'all.
Thanks for that RR.
Have you noticed how everybody is ignoring everything you post now. Does that tell you anything?
Best to chill out and crack open another can of super tennents.
Rant,
FTB’s and owners in their 30’s…………………..yes, ive definitely seen them recently too they are not some rare breed.
Another view some seem to have is that every buyer between 1996 and sometime in 2007 was some kind of hedonistic fool, drunk on the Nu Labour credit party stumbling carefree into debt and negative equity with self cert mortgages and god knows what income multiples and that isn’t the case, we just don’t see them on here or HPC telling us about it
Jonnie
Jonnie - am fairly sure I explained that I'm in the West Mids. Neither in the northern slums nor walking the golden-paved streets of southern England.
Of course there are folk out there as you describe. No doubt many of them bought a house ten or so years ago at a significantly lower salary multiple then they are available for today. And just when they were doing fine with paying off the mortgage, this country's savers via the Bank of England gave them an extra blessing of lower repayment rates. The grass really is greener on their side of the fence.
'Everyday you meet owners' like this you say. A vendor is obviously by definition an owner. Your post doesn't even mention FTBs though who have historically made up some 40% of the housing market. I don't know any houseowners (aka 'mortgage payers') under 30 years old. Amongst those in the mid 30s I know, only a small minority have bought. All of them are in negative equity. Here the grass really does resemble the field where people camped during the recent British Grand Prix.
There are HPC ladies - last time someone raised that question, one of them posted here about trying to get a deposit together to buy a place in London. For the record, there are several EAs who post on HPC too.
Yes but here's the really fundamental point.
The Laffer Curve: It explains everything!
As house asking prices are increased above 'market price', because of the disincentive effects of this, the number of sales falls.
Why? Because 'market prices' determine both the maximum price able to be achieved and also the maximum scale of activity in the market at any one time.
Therefore, the setting of 'appropriate' asking prices for the current market is absolutely crucial to both current and future market 'activity'. They should be geared to the actual prices able to be achieved in the current market.
Not understand, or bothering to take notice of this economic LAW, results in the sort of housing market that we now have.
When will estate agents up and down the country wake up and realise this? That's what I would like to know.
Hula Hoop,
Im going to aim this at Rant as we are old friends and ive been through this with him before but it’s for you as well
Rant, you are doing that thing again…………you know, the thing about all house sellers being some odd mixture of Daily Express reading Boomers or poor skint buggers fending off the bailiffs and its not the case.
I know we have had this thing about the area you live in before, I think I called it the ‘shit bit’ of the country and as I recall you agreed or at least weren’t too quick in defending it. You see the view that society is made up of eitheer happy renting HPC’ers OR poor souls that were stupid enough to buy a house isn’t the case
Every day I meet owners that are not fighting for financial survival, not wishing they had lived the life of a miser and invested in gold while shunting from one rented place to another delaying having kids and making various sacrifices and spending hours analysing any bit of financial data to continually convince their Mrs that she should stay on the pill a bit longer and the rented flat is a shrewd move …………..
you never seem to accept that there is a huge lump of society made up of people that are doing very well, paying a mortgage without any trouble, holding equity and many of them also investing in the very things the HPC bloggers talk so much about.
When they come to move they want something bigger / smaller / in a different area / near the sea and a so on and know what their place is worth, have a realistic view and most of all when they get an offer they talk it through with their EA and often look at what they can negotiate off the one they are moving to, they don’t have a fit because they have been insulted.
So, stop it mate, homeowners are not all as you think and many would be happy to look at an offer and do a deal as they are just as savvy as you, they just don’t have a blog to shout about it on
Jonnie
P.s – Never had this one answered, why are all HPC’ers men? you never get a girl one, odd that.
Jonnie
"When you walk into one that gives you a bit of a fizzy feeling (you will either get this in the first 30 seconds or not) you can then do all the research on historic prices online....."
That there was my problem initially. It's the wrong way round.
I can spare myself and your fellow EA's considerable pain by doing that research before viewing any actual houses.
However it is still a massive hassle keeping track of them over say 6 months until reality bites. I'm old school and use a notebook.
Oh well at least there are running races and cold beer to keep me occupied this summer. You too I guess.
Agree with much of hula hoop's post. I think there's another aspect to vendors' delusion than just emotional attachment though.
At the end of the day, most of the UK's population lives dull lives and are continually reminded by the advertising industry of the life they could be having. Until the last decade, the only way of telling the boss where to go and attaining anything appraoching that lifestyle was to win the lottery. People on the whole know that the odds involved there make that a pipe-dream though, so back to the dreary 9 to 5 it was...
...until house prices started booming. Here was a way where money that could fund a significantly better lifestyle seemed within reach. Want to retire early? Seeking a boost to your meagre pension pot? Then houses were the key to unlock that door and unlike gold, precious metals or fine-art, this was a market that large numbers of people had experience of operating in. There was also just about enough involved (paperwork, DIY, applying magnolia to walls etc) to convince many people that the returns they were seeing were a reflection of some sort of effort, rather than luck, ie 'deserved'.
The mainstream media, dinner parties etc all reinforced the message that property was the way out of averageness, and for some who cashed in at the right time, it clearly was. For the majority though, they are having to let go of the dream, and accept dullness again. It is hard to lower such expectations though. Of course, some who really bought in to the fantasy are going to find they have to spend even longer at their dreary jobs just to get back to where they were before.
@Jonnie, see the problem, as many potential buyers see it, is that vendors are emotionally attached to their houses. They brought up their kids there, they spent a month painting the nursery/ planting the garden / putting in the wardobes.
Now its time to sell. Along comes and EA and slaps a price on it that does not reflect an attainable price but his desire to secure the business.
Now the vendor has a price, not just for the property, but for their emotional investment.
Along comes a buyer (me) and sees a decent house. Unfortunately I'm on top of the market and economic outlook and realise that the place is 10% or 20% overvalued.
So, willing to pay a premium, I offer 15% less than asking.
What happens then is that the vendor sees this as an emotional insult; 'I fed my children in this house, theres no way I'm taking 15% off. Would he take 15% off the value of his kids?' etc.. etc..
Now what the EA realises is that I'm not there to buy someones lifestyle, I'm not paying for someones emotional stability and I'm certainly not there to fund someones retirement plans. I'm here to pay the minimum amount possible for a property I'm interested in. I see my -15% offer as generous (it should be -20%) and the seller sees it as an insult. Now the EA has to become a counsellor.
If you gave realistic 'market appraisals' in the first place you'd probably get a quick sale.
At the moment there are too many deluded, indebted and highly strung sellers out there.
That means I will continue to rent.
However, in 12 months time when the house is still on the market, I'll be offering £12k less (twelve months rent) than I did the first time; I have no intention of losing money because Mrs Shoddy-Smyth cant let go of her nesting years and her brown 1980's 'shaker-style' kitchen.
The pressure is on you lot, not me.
Now go and speak softly about the past, admire the photos on the mantlepiece and repeat over and over to your vendor... 'things have changed.... they're not the way they were... hush now.... take the offer and move on with your life.. there, there'
David,
Im sorry you have had this thing that’s left you focussed on a big running race; it’s a shame that your experience has lumped you on the sofa rather than finding a house you want but ill have a pop at helping you find you house buying mojo and try again.
Right, here goes……………….first off make sure you really want to do it, and I mean really want to do it – if you are a bit half arsed the EA’s might spot this and not spend much time on you , also you will find many, many people on here and elsewhere on the net that are quite sure that if they wait houses being sold today for say £1,000,000 will soon be as low as £1,000 and any figure between this and the one mill any time soon so if you are up for this theory (and there are some very nicely structured and researched views) then sit your self down and enjoy the Olympics and for god sake do not walk through the door of another viewing until the feeling goes away.
If all that is okay go and find a town you want to live in, visit all the EA’s in that town (there will be loads to choose from) and tell them what you want to buy, be specific as possible or you will appear to be a bit flaky, get to know one person in that office and you will find you build a relationship with them and will know if they are worth talking to, talk about the concerns you have about these vendors you want to avoid and with a big smile go and look at the ones you like.
When you walk into one that gives you a bit of a fizzy feeling (you will either get this in the first 30 seconds or not) you can then do all the research on historic prices online, bung in a dollop of emotion based on how much you ,like it and offer what you see fit based on all this – try and use your heart a bit as well as maths or you end up buying a house your Mrs hates forever and the only positive will be your ability to bore the tits of people at dinner parties about the master class in negotiation you did on it.
Good luck and don’t let the bastards get you down but remember an unmotivated / cant be fagged / don’t really want to try buyer is as much of a pain in the arse as these stupid vendors you seem to have kept coming across so go careful.
Jonnie
Buyers experience:
I would like to move house and did go for a number viewings but the experience is so painfull that I can't really be fagged with it. I think that I shall just get the drinks in and settle down with the Olympics instead.
It used to be the case that buyers would view and buy houses as pretty soon after they came on the market.
Now it's the opposite - buyers need to wait months while the vendors test out the market with a ridiculous asking price before slowly and painfully dropping tens of thousands of pounds, finally arriving at a sensible asking price from which to negotiate.
For me, life is too short for this.
R.M. "Listing an average of 102,121 fresh instructions a month" ...... of which a fair proportion will have previously been on with another agent.
The board chappy will have a better idea as to what % of houses are selling .....
Deliberate over-valuation didn't work in my case some years ago. Once it was obvious that the EA couldn't deliver I simply went somewhere else. I refused to sign a long contract in the first place!
Dont post here much because of the flame wars that break out so often.
I will for this article as the number of EAs defending the status quo is markedly down on other threads.
Have the ranters n'ravers got it right, after all?
"Even in seemingly unstoppable London, asking prices have fallen – by 3.6% since June, "
According to the full report, Kensington, Chelsea and Kingston Upon Thames are all down by more than 5% over the last month.
Blame RM, they should stop the bad boys.
Average asking price = £242,097
Average selling price = £160k
'nuff said.
But...but...but....I thought there was a shortage of property, with 10 polish immigrants fighting over every £300K home counties semi, and the average first time buyer aged 62......
Don't tell me those lovely honest people in the property and banking industries have been lying to us all along! Whatever next?
@ICant - because it works
Win the instruction, manage the owners expectations, reduce the price, sale, commission.
It is most unscrupulous, but it works...
What ya gonna do?
The market leader in my area has had a price reduction on at least 50% of his stock - perhaps even as high as 75%.
This is "as far as I can tell" and I might have got my figures wrong because it is just a survey of RM updates every morning.
The problem is that he is making a profit and I am surviving.
But then I have no problems sleeping at night (mind you neither does he in his very expensive house with several nice cars...).
For once RM have a point, but try telling the overvaluing Corporates that, perhaps they should.......aren't they major shareholders?
If this is correct WHY do the corporates and many others still over value to Win instructions.