House sellers across the UK are getting about £10,000 less than their final asking price as some of them demand ‘unrealistically high’ prices, new figures show.
The gap between the price home sellers are asking and what they actually sell for has increased from 2.8 per cent to 3.3 per cent over the past two years, meaning that now sellers achieve 96.7 per cent of the final asking price, according to research by Rightmove.
It comes as asking prices hit a new record high of £305,732 on average in April, having risen by £1,228, or 0.4 per cent, compared to March and by 1.5 per cent compared to the same month last year.
Rightmove´s figures show house sellers´ average asking prices across Britain (Rightmove/PA)
Both figures represent a slowdown in price growth, with the annual figure down from 2.1 per cent in March and the monthly figure perhaps showing a readjustment after a 1.5 per cent increase last month, Rightmove said.
But the website also said that, in terms of both house price growth and achieved selling prices, the picture differs greatly from region to region.
For example, in London, where prices fell by 0.6 per cent on a monthly basis and by 1.6 per cent in the year, the gap between the asking and selling price has widened greatly in the past four years.
Sellers in the capital were achieving 98.9 per cent of the asking price back in 2014, and that has fallen to 95.6 per cent this year, meaning a current difference of over £27,000 on the new seller average asking price in the capital of £628,039.
In the West Midlands, the only other region to have seen house prices fall since last month, the price achieved has instead risen from 96.4 per cent of the final asking price in 2014 to 97.5 per cent in 2018, making it the strongest region outside Scotland for achieving near asking price.
Scotland has the smallest difference with sellers achieving 99.4 per cent of the final asking price, but its different selling system is an influence here, Rightmove said.
The selling price percentage gap has increased from 2.8% to 3.3% over the past two years, evidence of a more challenging market in some locations, Rightmove said
However, Rightmove also said that buyers should not expect a discount as these figures ‘are just averages’ and many properties still sold for the asking price or even over if sought-after or already attractively price.
Miles Shipside, director of Rightmove, said: ‘Home buyers are seeing average asking prices at their highest ever level with upwards price pressure getting stronger the further away you move from London.
‘However, higher prices stretch buyers’ willingness to pay or ability to afford them.
‘This month’s increase of 0.4% is the lowest at this time of year since 2008, though the subdued figure could partly be a re-balancing from the seasonally large 1.5% rise the previous month.’
Rising: Typical first-time-buyer properties are up by 2.2 per cent average year-on-year
The region to see the biggest annual rise in house prices is the North West at 4.3 per cent, followed by the East Midlands at 4.2 per cent, Yorkshire & the Humber at 2.7 per cent, South West at 2.6 per cent, Wales at 2.4 per cent and the East of England at 1.2 per cent.
Typical first-time-buyer properties with two bedrooms or fewer are up by 2.2 per cent average year-on-year, while the sector favoured by second-steppers, mainly comprising three-bedroom properties, sees a 2.7 per cent rise.
In contrast, the more expensive top of the ladder category, typically detached with four bedrooms or more, has a more muted annual rate of increase of 0.9 per cent and is still behind its peak set in October 2017 (£542,347), Rightmove said.
Brian Murphy, head of lending for Mortgage Advice Bureau, said the Rightmove index showed one again a diverging market, with London experiencing a cooling in terms of both values and buyer activity, while other areas seeing ongoing upwards pressure on pricing due to lack of available properties for sale against significant demand.
‘Against that context, it’s not surprising that the average UK asking price has reached a new high, as for vendors in those areas where supply is tight, there is of course a temptation to test the water with a higher asking price,’ Murphy said.
‘However, what our mortgage advisers are seeing at the coalface is not only that properties which are being marketed at an ambitious marketing price are taking much longer to sell, even in areas of high demand, but also that the vendor then opens themselves up to the potential of the property being down-valued at survey stage.’
Murphy also noted how prices achieved by sellers across the rest of the UK appear to have increased in the last four years, whereas in London they have gone in the opposite direction.
‘Certainly, it would seem that this is a continuation of what we observed the previous month, and until such times as we see a significant uptick in terms of more properties coming onto the market in areas of high demand, it’s likely to be ‘more of same’ next month too,’ he added.