A former president of the National Association of Estate Agents has attacked “irresponsible agents” for over-valuing asking prices in London in order to win instructions and hit targets.
Simon Gerrard, who runs the Martyn Gerrard agency in London, says: “Agents with fair and realistic pricing strategies are being undermined by those only concerned with hitting monthly targets, rather than the health of the market and making the sales process as smooth as possible.”
Writing in the business daily City AM, he adds that this intentional over-pricing lies behind the growing gap between asking prices and sale prices in the capital, and is why so many sellers have to drop their prices.
“If asking prices were realistic in the first instance, properties would attract more interest earlier on and more movement would be seen throughout the market. Increased transactions leads to increased market activity, ultimately preventing periods of stagnation” writes Gerrard.
“Responsibility for fixing this issue lies with irresponsible agents” he insists, adding that failure to do so could lead to fewer homes coming to the market.
This is because would-be sellers may be deterred “after researching the area’s recent transactions and believing prices are falling. This can seem like an extremely depressing prospect for anyone trying to sell their home, and a bad sign for the UK property market, when in reality it’s a case of irresponsibly high pricing.”
Gerrard cites a recent Hometrack index to back his argument.
It claimed the average London home is now sold at 4.0 per cent below its original asking price, according to the Hometrack Cities Index, up from just 0.5 per cent in 2014.
“Many are taking it as a sign that homeowners are desperately discounting their homes in an effort to sell, and that the capital has now officially become a buyers’ market” say Gerrard - hike in reality, he claims, agents on the ground think there’s an excess of buyers over stock.