Are sellers becoming more realistic about house prices?

There are indications that many homeowners that are looking to sell their homes are becoming more realistic about the value of their homes, which has been reflected in a stark drop in property asking prices in the London area. Property prices have been falling for some months now, but some of the asking prices on properties indicated that many were refusing to acknowledge that their properties were falling in value.

However, with the sharp slowdown in house sales over recent months, which has been fuelled by a number of factors, it seems that homeowners looking to sell their homes have had to face up to the facts and admit defeat by reducing the asking prices on their homes. In fact, recent data shows that the average asking price in the London area has been dropped by a massive £21,000 in the last month.

House sales have been affected by a variety of factors, all of which have contributed to a remarkable slowdown in sales. This includes the difficult credit conditions brought about by the global credit crunch, which have made it far harder for many people to get the finance that they need to purchase a property.

Other factors include high borrowing costs, which are also affecting affordability, falling house prices, which are making people nervous when it comes to taking the plunge, and the possibility that stamp duty for many first time buyers may be suspected, which was what the government has recently indicated by not confirmed.

All of this has left sellers looking at a very bleak future when it comes to selling their homes, and many have been forced to cut the asking price to more realistic levels in order to increase the changes of a sale in the current financial and economic climate. The average house price in London now stands at £379,162, and the largest percentage fall was seen in the Wandsworth area, where asking prices fell by close to 8%.

One official from the property website Right Move said that sellers were realising the importance of reducing their asking prices, stating: ‘Faced with the scarcity of mortgage availability and the increase in unsold property, summer sellers have recognised the need to price aggressively.’

Another official said: ‘Sellers who choose to come to the market during the peak holiday season generally have a greater need to sell. As a result, properties coming onto the market in July were on average over £21,000 cheaper than last month. Every borough in London saw a month on month fall in asking prices in July, and in all but six boroughs asking prices are now lower than a year ago.’

He went on to state: ‘New sellers coming to the market are still seeking prices higher than a year ago in Tower Hamlets, Hackney, Islington and, to a lesser extent, Southwark. This is because these boroughs will see the benefits of new transport links in the near future, without suffering from current disruptions due to building works.’