Overpriced properties take twice as long to sell
The latest Zoopla House Price Index, published today (28 August), shows that overpriced properties take twice as long to sell.
It takes people twice as long to sell properties when they set the asking price at too high a level, Zoopla analysis shows.
It takes around a month (28 days) to agree a sale where there has been no asking price reduction, but sales take more than two months (73 days) where the asking price has been cut 5%+ to attract demand.
A higher proportion of homes with +5% asking price cuts also don’t sell at all.
Richard Donnell, executive director at Zoopla, said:
“Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale.
“Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.”
In the current market one in five homes are seeing asking prices cut by over 5%.
UK house prices rose by 1.4% in the first seven months of 2024, compared to 0.1% in the corresponding period of 2023.
Price inflation ranges from -0.9% in the East of England to +5.1% in Northern Ireland. It has turned positive in London (+0.2%), while prices are posting small falls in the South East (-0.7%), South West (-0.6%) and East Midlands (-0.1%).
Sarah Coles, head of personal finance, Hargreaves Lansdown, said:
“Sellers can’t afford to get carried away.
“Buyers are back, with demand up a fifth in a year, but sellers who get cocky, and price their home too optimistically, will pay a horrible price for their over-confidence.
“Sellers who end up having to cut their asking price by 5% or more take more than twice as long to sell – which for new sellers would mean squandering the back-to-school September market.”
Coles added:
“There’s plenty to cheer in this data, with house prices up 1.4% since the beginning of the year, buyer demand booming and more sales being agreed.
“The Bank of England interest rate cut has boosted sentiment significantly, and helped persuade buyers that now is a decent time to get stuck in.
“It didn’t have a dramatic overnight impact on average mortgage rates, but they’ve continued drifting southwards, and the fact they’ve been falling for a couple of months is starting to really add up.”
The average rate on a 2-year fixed-rate deal has dropped from 5.97% at the end of June to 5.58% now, Moneyfacts figures show.
Kindly shared by Property Wire
