Yesterday, Rightmove revealed that asking prices saw their biggest monthly increase in over 20 years, but property purchasing specialist, HBB Solutions, has revealed that despite a property market boom, the gap between the asking price expectations of the nation’s sellers and what buyers are willing to pay is as big as -21% in some areas of the market.
HBB Solutions analysed current market values and found that across Britain as a whole, the asking price to sold price gap averages 8%. This means that while the average home is selling for £278,120, it’s initially entering the market at £301,080 – £23,000 higher than the price buyers are currently willing to pay.
This market gap is at its widest in the North West, where the average asking price is currently £252,711, but homes are selling for £53,000 less – a drop of -21%.
This property price gap currently sits at -20% in Wales, with sellers adjusting their expectations by just shy of £50,000 before selling, with Yorkshire and Humber home to the third largest reduction in values (-19%) and a £46,000 gap between the average asking and sold price.
In the East of England, the gap between the original asking price of a home and what it achieves at market isn’t as large at 13%. However, the region is home to the biggest cash reduction, with home sellers overvaluing by £51,000 when setting their initial asking price.
London is home to the smallest gap of all regions, with sellers dropping their prices by just -5% in order to secure a buyer, while the North East is home to the smallest cash discount with a drop of just £18,000.
Managing Director of HBB Solutions, Chris Hodgkinson, commented: “British homebuyers have swamped the market and those looking to sell are benefiting from some record levels of house price growth in current conditions.
Despite this, we’re still seeing quite a notable gap between the price a home is listed at and the price that buyers are ultimately willing to pay. This is a pretty normal occurrence in any market and sellers will always list high in anticipation of the negotiation process, while buyers will naturally try to get the best price they can.
However, there’s certainly an additional layer to current market conditions in the sense that home sellers have been benefiting from a boost to buyer budgets as a result of a stamp duty saving and this has seen them achieve that little bit extra than they may have otherwise.
Despite buyers no longer benefiting from this saving, sellers are continuing to chance their arm in what is still very much a sellers market, but buyers are no longer willing to go to the same lengths as they were previously. The result of which is quite a considerable reduction in the asking price of many homes.
Disputes around price are one of the most common causes that can scupper a potential sale, even after an initial offer has been accepted. The best advice to avoid this scenario is to price your home ambitiously, but sensibly. Stand your ground to an extent but be prepared to negotiate and work to current market values, not your perceived value.”