Overpriced homes ‘a turn-off’

HOUSE sellers are being warned against starting off with an ambitious price tag when they put their homes on the market.

Researchers have found that asking too much at the outset only makes properties stand out as being of poorer value, putting buyers off.

This goes against the belief sellers should start high and only drop the price if there is too little interest.

Homes with a high starting price would have to attract many more viewings than similar properties in the first three weeks to reduce the risk of being left on the shelf, a study for estate agent Rightmove found.

Director Miles Shipside explained: “Over-pricing loses you that vital initial interest and impetus.

Warning

“Buyers often have reservations about a property that has not sold as quickly as others or has had a price reduction.”

The warning comes after average asking prices rose by just two per cent month-on-month in February – the smallest uplift seen at this time of year since February 2009.

Region by region, the South East of England saw the weakest monthly increase, with a zero per cent change leaving the average asking price at £404,951. Wales saw the highest, with an 8.1 per cent rise, taking the average to £177,556 – up £13,265.

Mr Shipside said slower growth means overpriced homes are less likely to sell. In a market where prices are rising fast, an overpriced property stands out less as the prices of other homes will catch up.

Three-quarters of estate agents polled by Rightmove said markets were “price sensitive”. Buyers were reluctant to even enquire if a property was even slightly overpriced.

Although the latest asking price jump is small, it is still £5,986 up, compared with January, making the average home worth £306,231.

Asking prices are 2.3 per cent higher than a year ago – the lowest annual rise since April 2013 – when the average price was £60,000 less.

Mr Shipside said: “With the annual rate of price increase now at 2.3 per cent, a property that is overpriced by more than 5 per cent will have to wait more than two years for the market to catch up with it.”