Getting the asking price right from the outset is crucial, but the current property market is particularly tough to judge. Buyers are keen, but is it a seller’s market?
The UK housing market has defied many predictions over recent months, with house prices rising and transaction levels making an unexpected comeback. Buyers have returned to the table in their droves to take advantage of the temporary stamp duty holiday. Meanwhile, sellers are eager to get the best prices for their properties while demand is high.
New research has found that many sellers are receiving – and refusing – discounted offers from buyers. One study by Strike shows that almost half (45%) of those selling property have received below asking price offers. Discounts buyers are asking for range from 5% to 10%, Strike claims.
A fifth (18%) of people selling property at present say they have had higher than expected interest. More than half (52%) of sellers are confident they can sell this year.
However, many sellers seem to be sticking to their guns for the time being. Almost a third (29%) say they will not accept a lower offer. Meanwhile, a quarter would consider a 5-10% price drop.
Seller confidence matches buyer demand
Thanks to the release of pent-up demand in the market in recent months, prospective buyer numbers have soared. Rightmove and Zoopla have recorded huge increases in visits to their websites, and many estate agents have seen a surge in registrations of interest.
Competitive mortgage rates are also enticing both homebuyers and property investors right now. The stamp duty holiday has provided further impetus for people to act now, as this is set to end next spring.
Sam Mitchell, chief executive of Strike, comments: “While buyers are always going to try and get a good deal on a property, and who can really blame them for trying, demand is so high that sellers might not feel the need to lower prices in the current market.”
“Many of our own customers are seeing multiple offers to choose from – an ideal situation to be in. But it is also important to remember, the quality of any offer is also worth weighing up.”
Getting the right price
In a separate study from property portal Rightmove, findings show that asking price is hugely important from the outset right now. According to the research, a property that is “priced right first time” sells in just 21 days. When sellers end up having to lower their asking price, it takes an average 47 days to sell.
When the market is hugely competitive, many sellers are tempted to price highly to make the most of buyer demand. Right now, with people keen to push ahead with transactions, some sellers may be pitching too high.
Tim Bannister, director of data services at Rightmove, said: “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.”
“The temporary stamp duty holiday means more sellers are in a hurry to get a sale through conveyancing, and with this also taking longer at the minute a realistic asking price could soon end up being the difference between completing in time or losing out on the savings.”