Re­duced house prices in time for Christ­mas

Western Mail - - BUSINESS IN WALES - Vicky Shaw Per­sonal fi­nance cor­re­spon­dent news­desk@waleson­line.co.uk

House-sell­ers ap­pear to have launched their own “au­tumn sale”, with more than one in three prop­er­ties on the mar­ket hav­ing had their orig­i­nal price slashed, ac­cord­ing to a prop­erty web­site.

Some 37% of avail­able prop­er­ties on Right­move are now ask­ing for a lower price than when they first came to mar­ket, mark­ing the high­est pro­por­tion at this time of year for five years.

For those who have had to re­duce their ask­ing price at least once, the av­er­age size of re­duc­tion be­tween first mar­ket­ing price and cur­rent ask­ing price is 6.3%.

Across Eng­land and Wales, the av­er­age ask­ing price on a home com­ing freshly to mar­ket in Novem­ber is £311,043 – down 0.8% or £2,392 com­pared with Oc­to­ber.

York­shire and the Hum­ber was the only re­gion to see a monthly in­crease in ask­ing prices, with a 0.6% up­lift tak­ing the av­er­age ask­ing price to £180,766 in Novem­ber.

The big­gest monthly fall was in the North-East of Eng­land, with a 5% de­crease tak­ing the av­er­age price tag to £144,186.

Miles Ship­side, di­rec­tor of Right­move, said: “In the run-up to the fes­tive sea­son, many sell­ers are try­ing to tempt dis­tracted buy­ers to look at their prop­erty by dan­gling the bauble of more at­trac­tive pric­ing given the qui­eter time of year and more chal­leng­ing mar­ket.

“Many sell­ers who have been on the mar­ket for a while are curb­ing their ini­tial pric­ing op­ti­mism and are hop­ing that re­duc­ing their prop­erty price will re­sult in buy­ers se­lect­ing it as this year’s must-have Christ­mas gift.

“The ef­fect is an im­promptu au­tumn sale, with the largest pro­por­tion of sell­ers on the mar­ket hav­ing re­duced their ini­tial ask­ing prices at this time of year since 2012.”

Mr Ship­side said that the mar­ket has been “price-sen­si­tive” for a while, and the high pro­por­tion of prop­er­ties hav­ing their orig­i­nal ask­ing price re­duced sug­gests some sell­ers and their agents are over­pric­ing.

He said: “These sell­ers may well be ask­ing them­selves if they could have saved some time and stress by pric­ing a lot more con­ser­va­tively than an av­er­age of more than 6% ahead of what the mar­ket sub­se­quently proved it could sus­tain.”

Right­move’s anal­y­sis of homes that have suc­cess­fully sold sug­gests that those that sell typ­i­cally gen­er­ate over 40% more on­line in­ter­est in the first three weeks than those that do not sell.

Mr Ship­side said: “The dan­ger of go­ing too high at the out­set is that you jeop­ar­dise that vi­tal ini­tial three-week pe­riod and may have to start on a se­ries of price re­duc­tions, while po­ten­tial buy­ers watch and as­sume that no-one is buy­ing your prop­erty be­cause some­thing is wrong with it other than the price.”

Right­move’s re­port also quoted the views of es­tate agents.

Lucy Pendle­ton, co-founder and di­rec­tor of es­tate agent James Pendle­ton in London, said it is vi­tal for sell­ers not to dis­count their home in “dribs and drabs”.

She said: “By drop­ping the ask­ing price in in­cre­ments, all you suc­ceed in do­ing is mak­ing your prop­erty look stale and un­wanted, with none of the surge in view­ings that a keen dis­count can bring.

“A re­duc­tion should be in the order of at least 5% if you want to drive sub­stan­tial in­ter­est, which, iron­i­cally, can re­sult in you achiev­ing the price you orig­i­nally wanted any­way.”

Kevin Shaw, na­tional sales di­rec­tor at Lead­ers, said: “Over­all, de­mand from buy­ers re­mains strong across the coun­try and sell­ers can be pos­i­tive, but now is not the time for over-op­ti­mism.

“Start­ing too high and hav­ing to re­duce the price can re­sult in a prop­erty go­ing stale on the mar­ket and pos­si­ble fur­ther price re­duc­tions later, which no seller wants. Be­ing re­al­is­tic achieves far bet­ter re­sults in the end.”

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