Autumn price drop: number of homes with reduced asking prices hits five-year high in England and Wales, with London sellers hit hardest
The number of homes for sale with reduced asking prices is at the highest level in five years. More than a third of home sellers across England and Wales have dropped prices, making it a good time for buyers to secure a deal in the run-up to Christmas.
The proportion of reduced properties is even higher in London, with 43 per cent of sellers dropping the price by an average of seven per cent.
Reductions in new seller asking prices are to be expected at this time of year, with prices set at about £1,400 less than they were this time last month in London and £2,400 less nationwide.
"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," says Rightmove director Miles Shipside.
"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."
LONDON ASKING PRICES
Over the past year, the average asking price for a London home has fallen 2.4 per cent to £628,000. Prices are lower across two thirds of London boroughs, with Islington seeing the highest price falls of 13 per cent.
The more affordable boroughs on the fringes of the capital are seeing modest price growth, especially in east London. Barking and Dagenham, London's cheapest borough, has seen price rises of 3.3 per cent to £313,000 over the past 12 months.
NATIONWIDE ASKING PRICES
However, prices are still up in most regions by an average of 1.8 per cent on this time last year, apart from across the North East and London, so this fluctuation is in line with seasonal trends.
Head of lending for the Mortgage Advice Bureau, Brian Murphy, says: "As we’ve been seeing for over a year now, in many areas of the country there still isn’t enough stock to service buyer demand and there are regions, such as the East Midlands, South West and many parts of the North, where prices have seen higher increases than the in the last few months, in part as a consequence of low supply, but also due to better affordability."
PRICING RIGHT
The Rightmove data indicates that buyer demand has cooled. Shipside believes that despite lower asking prices, many of this month's sellers have not priced their properties low enough to entice more cautious buyers.
Analysis of 100,000 sold properties shows that houses which typically generate 40 per cent more interest in the first three weeks have a higher chance of selling than those that do not.
He says: "The danger of going too high at the outset is that you jeopardise that vital initial three-week period, and may have to start of 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."
"A reduction should be in the order of at least five per cent if you want to drive substantial interest," advises co-founder director of James Pendleton estate agent, Lucy Pendleton.