Home Buyers Discount from the Seller’s Asking Price Increases
If you’re a buyer and a strong negotiator, the UK property market might be turning in your favour. Sellers are proving to be over-optimistic and putting price tags on their property that are too high for the already stretched buyers’ market.
Asking prices rose by 0.4% from March to April to a record high of £305,732, but this doesn’t necessarily mean sellers are actually getting that price. The gap between asking and selling prices has risen from 2.8% to 3.3% and an even gap higher of 4.4% in London.
According to Rightmove’s data, sellers are achieving 96.7% of their asking prices, however, a third of properties are forced to cut their prices and then settle for 95-97% of their already slashed prices.
When looking at the data from Rightmove on percentage difference from asking price to sold price and comparing it to the data of annual property price increase, they appear to be running parallel. The North West had the strongest annual price rise at 4.3%. However, the asking price and final sold gap is 3.5%, a difference of 6,847. The East Midlands had a 4.2% rise but their gap is 2.8%. In regions such as Yorkshire & the Humber the asking price increased 2.7% but the gap is 3.5%. Although the UK market is still a seller’s market due to limited supply, it’s becoming clear that sellers asking prices are out of buyers budgets across the country.
London Buyers Receive the Largest Discount
London has seen the biggest shift in favour of the buyer. The average difference between asking price and the price a property is actually sold is £27,000 and the average asking price of a London property is down 4.4% to 628,000. In 2014, when the market was at its highest in London, the difference was a mere 1% between asking and sold price. Sellers in London have yet to readjust to the buyers budgets and they’re having difficulty fuelling interest.
Property prices in London need to shift to affordability and sensibility as competitive prices are required to make a sale actually happen in Central London and surrounding boroughs. Sales are happening where buyers and sellers are on the same page. Ultimately, buyer’s affordability has a limit, and regardless of market, sellers who price their properties realistically are going to sell faster and for their asking price.
On trend with what we see in the more expensive London markets, properties around the UK are seeing an increase demand on more affordable properties. Properties with 1 or 2-bedrooms, favoured by first-time buyers, are up by 2.2% on the year while properties with 3 or 4-bedrooms, favoured by second-steppers, are up by 2.7%. However, properties on the higher end have seen a muted annual raise under 1%.
What about the rest of The UK
Many areas around the UK are seeing property prices rise to record levels, but it’s not uncommon for sellers in new hot markets to test the waters and put out a higher asking price. However, sellers will often find that their properties are taking longer to sale and eventually have to lower their price. An appropriately priced property will sell your home faster and improve your negotiating power, rather than the buyer.