|
|
| TUESDAY 16TH AUGUST 2005 |
 NEW
SELLERS FORCED TO UDERCUT UNSOLD STOCKS
118,000 new sellers of homes are being forced to undercut prices
of rising unsold stocks, said online company Rightmove yesterday. And the
number of properties measured coming onto the market remains consistently
high, maintaining pressure to keep prices low.
This high level of competition is forcing new sellers and their estate
agents to maintain the ‘summer sale’ mentality, in spite
of some tentative signs that the market is recovering. The number of
properties for sale per branch grew from 71 in July to 72 this month,
keeping the market heavily weighted in favour of the buyer.
Miles Shipside, commercial director of Rightmove, comments "More
estate agents are declining to market properties if the seller wants
to try for too high a price. It’s a tough message to sellers, but
if an estate agent has already got similar or cheaper properties that
are not selling, they are thinking, ‘why have more’. There
is too much unsold property still available to expect anything other
than a continuation of static asking prices this year."
Although buyer demand appears to have picked up, property stocks are
still at historically high levels. In most parts of the country it will
therefore remain a strong buyer’s market until at least the spring
of 2006, according to Mr Shipside.
Rightmove analyses data from around 60% of estate agents, and this shows
average property stocks per estate agent branch running at 13% higher
than this time last year.
They have increased further this month, from an average of 71 to 72,
in spite of evidence of increased activity. In conditions of local over-supply,
sellers have to price below the rest to stand out and attract buyers.
Time on the market has also edged up by three days this month, increasing
from 75 days to 78. Whilst it is taking longer to sell, it is not unusual
for this time of year, and smaller than last month’s increase of
five days.
Miles Shipside comments "In some ways this is quite a healthy market.
If buyers are around and making sensible offers, then estate agents can
give clear evidence to their sellers on the correct price. The market
is finding a new level of sustainable pricing, and sellers appear to
be coming to terms with it by lowering their ambitions."
"Estate agents now have more confidence in their pricing advice,
as they have a lot more solid evidence than six to nine months ago, when
sales were scarce. The clear punishment for asking too much is a sentence
of extra time on the market."
Average asking prices fell by 0.2% (£367) this month. Asking prices
have now dropped for two consecutive months by a total of £2,360,
or 1.2%. This month’s measurement of 118,000 new sellers to the
market shows there is increasing realism on prices.
Last year's peak in prices was £196,198, in July 2004. Average
asking prices now are only £84 higher - an effective standstill
over the past thirteen months. The year-on-year rate of increase has
gone up slightly to 2.1% due to a large decrease in August 2004, which
has now worked its way out of the year-on-year figure
|
|
|
