Sellers being forced to slash prices
According to a recent report homeowners that are looking to sell their properties are being forced to slash their asking prices in order to secure any hope of selling their property in the current financial climate. Fears over negative equity due to falling property prices, coupled with difficulties in obtaining affordable mortgages, has left many people unable or unwilling to purchase properties, and sellers are having to reduce the asking price by way of incentive to encourage people to buy.
The data comes from the Royal Institute of Chartered Surveyors, which claims that in some cases sellers are having to cut their asking prices by an average 9%. Over the past year house prices have already fallen considerably, so sellers that are having to make further cuts on top of the reduced value of the property may be losing thousands of pounds simply to try and get a sale in the current stagnant housing market.
An official from RICS said: “With housing transactions currently at a 30-year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up. The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible.”
The North of England is suffering most when it comes to the gap between the asking price and the selling price according to officials, with a gap of around 12.5%. In the Midlands, the North West, and Wales the gap was 10%, and in London it was around 8.5%.
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