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Cutting an asking price has become a less effective selling strategy this year, research claims.
Data from estate agent prospecting tool Spectre shows that in 2022, 49% of the properties reduced in January had sold by the end of February - but this dropped to 39% in 2023.
The figures also show 9.1% of reductions dropped their price more than once in the first two months of the year, evidencing the market’s heightened price sensitivity.
Heather Staff, co-founder of Spectre, said: “These numbers show that pricing is an ongoing issue for both agents and sellers, and reinforce just how important it is to price right the first time.
“With the percentage of sales from reduced properties falling year-on-year, there has never been a better time to make sure you are valuing correctly. This will be one of the most effective selling strategies for agents, as price drops are becoming much less effective and are not generating the right amount of interest.
“This also gives agents an opportunity to target sellers whose properties are still on the market despite a reduction in price, to see if they can offer a better approach.”
Spectre’s data shows the period following a price reduction is the most likely time a vendor will consider switching agent, and agents should capitalise on this prospecting opportunity to maximise their marketing budget.
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In short, house prices still have some way to fall. I'm afraid an 'old -timer' like me is wedded to the belief that, in the long-term, there cannot be too great a divergence in the house price / average income ratio. This ratio has been stretched beyond credibility in recent years and it needs to be remedied to restore the housing market to a more realistic long-term path.
Kind of agree except that we also have a massive housing shortage which, in turn, helps keep prices high. Time will tell.
Yes they will continue to fall due to momentum and lag. In response to the reply below; Whilst there is a housing shortage, its irrelevant if people can't get the money to buy. A housing shortage only shows likely intent when money gets cheaper and thus the size and pace of a reversal.
There isn't a figure for how much property prices are being reduced by to sell the property it could be that that affects the number of properties selling after a price reduction. For example, a 20% reduction should have a better impact than a 5%.
Other variables such as total number of properties for sale and total number of applicants, viewings and offers would also be useful. Also, analysis that excludes the London bubble with a more local focus may proof useful. Finally, if the works been done, what percentage of sellers change agent after a price reduction?
Uni-data analysis rarely yields much more than a headline!
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