Average UK property selling for £10k under asking price
Analysis of asking prices and eventual sold prices of properties in England and Wales has revealed the average property over 2017 is sold at 3.86% – or £10,623 – less than the asking price.
The research was conducted by Zoopla, a property website, which used Land Registry data between August 2016 and September 2017 to compare the average maximum asking price on listings with the average sold prices. This was then compared with the data between August 2015 and September 2016.
Daniel White, managing director at White Financial Services, said that the figures at face value might be masking some background mechanics.
“The stat might come from properties being slightly overpriced, with agents trying to get the highest price they possibly can from the market.” said White.
“If an agent comes to you saying your house is worth £10,000 more than what the previous agent told you, rather than questioning the integrity of the agent, you’ll go for the higher price.”
“And perhaps buyers are also being a bit cynical and going in and seeing how much they can test the market,” he said.
“I don’t think it has a knock-on effect on the mortgage market,” White continued, “If you do all the work with an adviser from day one, you can work [the price differences] into the budget, and the rate you’re going to get isn’t going to change.”
Regionally, properties in the South East of England are selling closest to the asking price, with a 3.06% difference. This was followed by the East of England, with final prices 3.16% below asking, and the West Midlands at 3.35% below.
However, sales in Wales saw the biggest gap, with properties selling for 5.87% under asking price. The North East of England saw a 5.53% difference, and the North West 4.46%.
On an annualised basis, properties in Yorkshire and the Humber have performed the best in terms of closing the gap between asking and final sale, with the figure decreasing by 0.54% from 4.88% to 4.34%.
Despite having the largest price difference, Wales was joint second alongside the West Midlands in reducing price differences, with both closing the gap by 0.46% compared to 2016.
Meanwhile, London saw a 2.13% drop year-on-year, with properties in 2017 being sold at 4.09% under the asking price, compared with the 1.96% average figure witnessed in 2016.
However, founder and director of London Money, Martin Stewart, thinks that if anything, the gap could be higher than the analysis suggests.
“The market is a buyer’s market, particularly in London. I would be impressed if the figures between asking and selling prices was as close as Zoopla are saying because we’re seeing them at around a 10% differential in many cases.
“I think we are seeing buyers play hard ball and if the vendor’s not prepared to negotiate then the buyer is happy to walk away. Once again too many agents are encouraging sellers with totally unrealistic sale prices. Any down-valuations we are seeing are on remortgages where the owner has assumed the price their neighbour sold for last year is still valid, plus 10% on top for good luck.”
Lawrence Hall of Zoopla, said: “It’s perhaps unsurprising that properties in the south of the country are currently selling closest to their original asking price, as demand for properties in the capital and its surrounding commuter belt remains high.
“Though it is interesting to note that these same areas are the ones that have seen sale values slip furthest from the asking price over the past year, which is perhaps reflective of a slight slowdown in market activity in and around the capital.”