10 Jul 2019
Asking and Sale Price Gap widens UK Housing Market
UK Housing Market: Gap between Asking Prices and Final Sale Price Widens
The gap between the average asking price and final sale price is widening in almost every UK city, according to the latest Zoopla house price report, rising from 3.3% in 2018 to 3.9% during the first quarter of this year.
Six cities recorded average discounts above the current national figure including Aberdeen, London, Newcastle, Liverpool and Oxford and in only two cities are homes selling for more than their asking price; Glasgow and Edinburgh. Zoopla says properties in Edinburgh sell for 6.3% more than their listing price, while stock in Glasgow shifts for 5.2% above asking price.
Richard Donnell, Research and Insight Director at Zoopla, says, “Sellers are having to accept slightly higher discounts to the asking price in order to achieve a sale. This is a natural response to weaker market conditions and buyers are starting to negotiate harder on price. The increase between asking and selling price is off a low base. Correctly priced homes continue to sell within a reasonable period and setting the asking price at the right level remains a key decision to agree with your agent.”
Homes Represent Most Valuable Asset to 67% of UK Owner-Occupiers
Ian Stewart, Chief Economist at Deloitte UK (below), says, “To outsiders the British can seem slightly obsessed with house prices. Yet it is an asset that matters. Two-thirds of UK households are owner-occupiers and 35% of household wealth is tied up in property.
“The value of that wealth has risen by almost 50% in the last ten years. Taking account of rising house prices and rental costs the average homeowner has enjoyed a return of roughly 8% a year in the last ten years – slightly less than the return from equities but far faster than earnings which have risen by around 2% a year over this period. Since the recession the average home owner has made far more from increases in the value of their home than from pay rises.
“However, in the last three years the housing market party has tailed off. UK prices rose by just 1.4% in the last year. London prices fell 1.9% but this has been offset by modest gains in most other parts of the country.”
House Prices Set to Fall for Remainder of 2019
House prices are likely to continue falling for another six months in the UK and for the whole of 2019 in London and the south-east, according to an industry survey. Separate official data shows that rents are also falling, with tenants typically paying £757 a month, down from £772 a year ago, continuing a pattern of declines that began after the Brexit vote in 2016.
The Royal Institution of Chartered Surveyors (RICS) said that its March poll of surveyors found a subdued picture across the UK, with sales weak and an eighth successive month of falling inquiries from buyers.
The average time it takes to sell a property remains unchanged at 19 weeks, the joint longest period since the RICS started recording the data in 2017. It added that it takes longest to sell a home in the south-east of England, at 21.5 weeks on average.
The moribund market is deterring potential sellers from putting their homes on the market. The RICS said: “The ongoing decline in new instructions being listed for sale has intensified of late.”
The surveyors’ body does not record house prices, but instead gives a net positive or negative balance about where surveyors reckon prices are heading. “The survey’s headline price net balance came in at -24%, from -27% previously,” said the RICS.
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