Sellers and agents are clearly concerned about market weakness with Zoopla reporting that 32% of properties placed onto the market have had a price reduction. The average reduction has been 6.1% which has overall reduced the asking prices of properties on Zoopla by £1.5Bn.
Some northern English locations have been particularly badly hit for example Barnsley tops the list with 44% of all listed properties having had their prices reduced, Manchester and Rotherham are also mentioned as having had significant price reductions.
Glasgow and parts of the South have so far suffered the smallest proportion of priced reductions.
For conveyancers this means that estate agents and valuers are using the tools provided to them in products like Rightmove to identify over valued properties and to encourage their clients to reduce the price of their houses. This in turn will result in lenders’ valuation surveyors and automated valuation models being more cautious about valuations they place on properties for mortgage purposes. Conveyancers may see more chains collapsing as mortgage valuations do not support the prices buyers have offered.
Struggling conveyancers should watch their work in progress carefully in case the fall through rate grows and “no sale no fee” promises start to hit them hard.
Nicholas Leeming, Commercial Director of Zoopla.co.uk
, said, “Sellers across the country are certainly feeling the heat this summer as the recovery has slowed and the market direction is uncertain. More and more sellers are cautiously reducing asking prices in a bid to attract buyers and lock in the house price gains of the past 16 months. But, Britain is not one uniform housing market and smaller reductions are clearly evident in some locations in the south of England where the outlook for employment and economic growth is brighter. In a buyers’ market, astute house hunters will be on the lookout for properties with the biggest reductions in the hope of picking up a bargain.”