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Asking prices drop as more properties stick on market

16 November 2010
Written by rosalind renshaw

Asking prices for properties new to the market have dropped by 3.2%, Rightmove said this morning.

While it was the biggest monthly drop since December 2007, the huge gulf between asking prices and selling prices continues and currently stands at around £65,000.

Rightmove’s average asking price of £229,379 compares with £164,919 quoted by Halifax and £164,381 quoted by Nationwide.

This is despite the fact that asking prices have fallen in four out of the last five months, according to Rightmove.

The site also reported an unseasonally high number of unsold properties and the longest-ever time on the market, now standing at over 100 days.

The number of new sellers coming to the market per week has fallen, down by 9.1% over the last month. The total number of new properties being listed on Rightmove each week is now just over 24,000.

Commercial director Miles Shipside said: “Agents report that the Christmas slowdown has come early this year as both would-be buyers and sellers are adopting a ‘wait and see’ policy.”

He added: “First-time buyers and buy-to-let investors both appear to have gone missing from estate agents’ books.

“Perhaps they are keeping their hands in their pockets in case their budgets go further in a few months’ time.”

Shipside said the continuing mortgage drought was a major factor: “The Bank of England’s latest figures for mortgage approvals show that the ratio between new property supply and successful mortgage applications is still stuck at around two to one.

“The ongoing mis-match is helping to cause stagnation in the market.”

Meanwhile, the website Home, which tracks data from all the property portals, said that 95,335 properties had their asking prices cut last month – a 21-month high. It said that time on the market jumped nine days, to 118 days.

It put the current average asking price as almost identical to Rightmove’s at £229,521. The key difference is that Rightmove’s asking price is for properties new to the market, whilst Home averages the asking prices of all properties on the market.

Comments

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    Give the vendor an honest appraisal of their property, if they are not willing to be realistic in their asking price then perhaps it's time they moved to another agent who is willing to waste their money marketing it...

    • 18 November 2010 16:33 PM
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    Asking prices aren't falling enough. Furthermore, many of my vendors are turning down perfectly good offers. They think they're entitled to make money on their house.

    • 18 November 2010 13:17 PM
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    Mr Wilson, nothing is "TOO BIG" to fail, nothing. If you honestly think differently then you are a fool. The upcoming changes being forced through by the FSA will change the landscape in our industry forever. Fortescue-Smyth has hit the nail on the head, we have to be honest with potential vendors, there's no point taking an instruction on an unachievable price, we are no longer in 2007, the buyers out there are well informed, we must change or we will cease to exist.

    • 18 November 2010 11:33 AM
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    The scary comments from the Telegraph can be ignored. This baby is now, like the banks, too big to fail. This was a property bubble but, in some areas of the country, the bubble has been inflated for 10 years now. A huge amount of money has been lent (as mortgages) into the housing market.
    A 40% correction to mean will take the banks and the economy with it - long before this happens the printing presses will be rolling and inflation will be let rip to inflate the debt away.
    Fear not, the property market is safe. Transactions will be low for a long time - but prices will not go down much. And, as always, good properties in good areas will not only sell, but command good prices too.

    • 18 November 2010 10:48 AM
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    As long as you all keep paying your monthly subs to list your properties on the portals - that's all that matters.

    Something I am curious about, how come in a market with about a third of the transactions in the 'good old days' some portals (no names, no packdrill) claim the site has 'just had the busiest month ever' in terms of individual visits. Is looking at property by people who have no interest in buying or selling the latest craze?

    • 18 November 2010 10:45 AM
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    we will fight you on the beaches! lol

    • 15 November 2010 17:50 PM
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    There's an interesting - if rather scary - comment attached to the Telegraphs's take on this story:

    1) Prices are some 41% above the 100-year median line. After previous property bubbles, prices have always returned to this line (after overshooting on the downside).
    2) Banks are sitting on £20 billion of underwater property loans and are loath to take on more risk (and the housing market is currently the riskiest asset out there) see 1)!
    3) The UK consumer is the most indebted he/she has ever been in the history of UK debt. There is no more fuel for the fire.
    4) As soon as interest rates begin to rise--and they will, regardless of the massive government intervention to hold them down to zero, prices will begin to fall fast and faster. See major sell-off in bonds now happening--rates are rocketing upwards.
    The biggest property bust of all time is--albeit in glacial fashion so far--gathering speed.

    My view - the only way to stay in business is to be honest with people about the coming storm. The few buyers out there will go where they think there's a deal. As far as sellers go, the living in 2007 cloud cuckoo land brigade are a waste of everyone's time and energy.

    • 15 November 2010 13:46 PM
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    @High on a hill: Ve know vhere you live. Ve vill be rryound shortly. Ve afraid.

    • 15 November 2010 07:49 AM
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    looks like Rightmove will have to cut its variable rates!! to help Estate Agents!! What was that Gerry Lewis song........"THAT WILL BE THE DAY"!!!!!!

    • 15 November 2010 07:24 AM
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