new figures reveal overpriced properties are taking 26 days longer to sell
Since mid-May, when the housing market reopened after lockdown, sellers who set the asking price right first time have found buyers in half the time.
Owners who chance their arm with a ceiling-shattering asking price for their home, planning to drop it if they don’t find any takers, might find the daring strategy comes back to bite them.
According to new research, homes are twice as likely to find a buyer if an offer is accepted on their first-listed asking price.
A study of the progress of 300,000 homes put up for sale between mid-May, when the market reopened after lockdown, and the end of July found that by the start of September, only one in three of those where the price had to be reduced had found a buyer. Those which had not undergone a price trim had enjoyed a 63 per cent chance of being sold.
The research, by Rightmove, found that the average time it took to sell the correctly priced homes during the four-month research period was just 21 days.
For those that had to be reduced, the average time - for those that found a buyer - was 47 days.
Reductions are a common feature of property sales in the UK. Since May around one in five London properties put up for sale has had its price dropped by an average five per cent. “If sellers are serious about selling, then starting with too high an asking price can cause unnecessary delays, and also make it a lot less likely they will actually find a buyer in the end,” warned Tim Bannister, Rightmove’s director of property data.
In Shepherd’s Bush Simon Waller, sales manager of Winkworth estate agents, said correct pricing – in line with prices achieved by similar homes in the immediate area – is crucial. “Then you get a flurry of activity in the first few weeks, and you can end up with a couple of people even vying for the property,” he said. “You will see a quicker and healthier transaction.
“If you have to cut your price you have lost your shiny new instruction appeal.”
Buyers, said Waller, tend to be very well-versed in up-to-date local price levels. Aware what others have paid for similar properties, they are unlikely to go higher.
Some owners believe that having an expensive kitchen or well-decorated bedrooms will earn them a premium. Waller agrees – but with a proviso. “If someone wants your specific kitchen they might give you a few thousand extra for it compared to the house next door, but don’t expect much,” he said.
Homes can be overpriced for a variety of reasons, including rapid shifts in the underlying market, genuine mistakes, and unscrupulous agents making unrealistically high valuations to win instructions.
This summer Noel Gallagher was reported to have finally sold his home in Little Venice for £8million after an epic four-year wait. The six-bedroom, Grade II-listed townhouse had been for sale since 2016, and the High Flying Birds frontman and former Oasis musician was said to have slashed the original asking price by £3.5million to cut a deal.
