With this month’s Comprehensive Spending Review just revealed by the Coalition Government, many commentators have been speculating that the drastic cuts might very well cause a double dip recession, but someone forget to tell the public.
Average Asking Price Rises in October
With mortgages still difficult to come by, very high levels of property being offered for sale, the deep cuts of the Comprehensive Spending Review and all the media speculation pointing toward a double dip in the property market, one might expect that asking prices would take a dip this month. However, Rightmove’s House Price Index for October reveals that house sellers priced their homes at 3.1% more than last month.
Even given the market conditions, this price rise is not entirely surprising. Following the quieter months of the summer, sellers who begin to market their homes in October have traditionally priced their homes with a slightly increased price tag. This pattern has been repeated every year since Rightmove’s House Price Index began in 2001. Even thought this past month marked the fourth October since the start of the credit crunch, seasonal trends in pricing have not changed.
Miles Shipside, director of Rightmove, comments: “Given the challenges of the current market, the behaviour of sellers in raising their average asking prices by over £7,000 takes some explaining. Every year, vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in a new home before Christmas. Between 2007 and 2009, October sellers tried higher prices in spite of the ‘credit crunched’ housing market, and it’s a habit that is proving hard to kick in the ‘spending review’ market of October 2010.”
October Price Rise Highest Since 2003
The average rise measured in October for the last 10 years is 2.0%. This year’s hike of 3.1% is the highest October rise since 2003 (3.3%). While the price rise is expected at this time of year it is a bit surprising given the market conditions.
London Family Homes Most in Demand
Although most of the UK housing market is flooded with stock, owners of family houses in London will be gratified to know that they remain the sector that continues to remain in demand. Family homes are in short supply in London where new sellers put up their average asking prices by 5% this month. This rise in asking price is not that far off the 6.5% rise in London’s asking prices at this time last year. Keep in mind though that London buyers’ lack of choice has now been eased by a 34% year-on-year increase in new stock, rising from an average of 3,455 to 4,624 properties per week.
Price Your Property Right at the Outset for a Quick Sale
Many estate agents recommend it and many sellers choose to do it – that is, to introduce a new instruction to the market with a higher price to “test the market”. With the abolition of Home Information Packs, it costs the seller nothing to price their property speculatively in this way. However, what it may cost you is a quicker sale. Properties priced in this way may eventually sell, however, it may take time. Rightmove reports that the initial surge of interest from buyers in a property’s online details drops away sharply after the first week.
Shipside comments: “ When a property is launched to market the seller’s objective is to create a sense of urgency to view amongst buyers and a feeling of fear that by not viewing they will miss out on their dream home. This strategy is enhanced if it is keenly priced as buyers will act fast to get a possible bargain. If a newly marketed property fails to initially impress and find a buyer then it can quickly go stale and get written off even though its price may subsequently be substantially reduced. A high launch price can damage your chances of securing a sale and in recession-hit markets you often end up chasing prices down and achieving less in the end.”
The Moral of the Story
If you want to sell your property quickly and at the best price that you can get (so that you can go ahead and buy a property, similarly priced to sell) then you need seek the advice of an expert who knows the market, can tell you what buyers they could get through your door and knows exactly what competing properties and prices you are up against. And then, of course, you need to follow that advice.
To get an expert advice on getting your property sold for the best price, call Northfields today for your free, no obligation valuation on 0208 840 6666 or request your valuation online here.