UK: Sellers chop asking prices as buyers thin out
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.