Research undertaken by property portal MoveStreets, shows home sellers are currently over-optimistic about selling in the current market and are over-pricing their houses by an average of 13%.
The research showed that across Britain, the current average asking price of houses across property portals sits at £296,950, but houses aren’t actually selling at this price, with the average sold price at £258,464, 13% lower than the listed price.
In some areas the gap between listing price and sold price is much greater. For example, in London the average asking price is £833,994 but properties are selling for much lower, at £494,673, a difference of 41%.
Behind London, the next largest gaps were found in the South West, with a gap of 24%, the South East, with a gap of 23%, and Wales, with a gap of 21%.
In contrast, Scotland saw the most realistic listing prices, with a gap of only £6,983, or 4%.
The table below shows the difference between the current average asking price vs the average sold price in each region:
|Region||Average Asking Price||Average Sold Price||Difference (%)||Difference (£)|
|Yorkshire and The Humber||£210,728||£180,324||-14||£30,404|
|East of England||£384,561||£312,076||-19||£72,486|
Average asking price sourced from combined average across Zoopla and Rightmove. Sold Prices sourced from the Gov.uk – UK House Price Index (latest available).
What has been said?
Adam Kamani, CEO and Co-Founder of MoveStreets, said’ “We’ve seen an incredibly hot market of late and despite the end of the stamp duty holiday, high levels of buyer demand and low levels of available stock continue to see properties fly off the shelf at pace and for a very good price.
“However, it’s clear that even in current conditions, many sellers are listing their homes at an over-optimistic price point, no doubt in an attempt to take advantage of the market boom.
“This can be detrimental to your sale regardless of how the market is performing and can result in months of little to no interest in your home. It’s the responsibility of the listing agent to guide sellers and set these expectations. While some will value a home at a higher price point to win business, a difference of ten to hundreds of thousand pounds above market value is perhaps a little too far.”
What does the future hold?
With house prices still being at the top end of the scale, despite the end of the stamp duty holiday, this begs the question as to what the future holds regarding the housing market.
Are house prices going to continue rising? Are sellers going to continue overpricing their houses to find them selling a great deal cheaper?
Of course no one can know for sure what lies ahead but house prices can’t continue to rise over time, as they will become unaffordable, and the demand will drop. When there’s a surplus of supply compared to demand then prices begin to fall.
We’re also heading towards the winter months, which are the least popular time of year to buy a house, suggesting we may be about to see a drop in asking price, but not necessarily sold price, bringing the gap between asking price and sold price closer together.