More sellers having to turn to price cuts

Wednesday 17th August 2011
Written by Rosalind Renshaw

Two in five properties on the market have had their price lowered at least once, with the average reduction being 7.1% off the original price – equivalent to a cut of £18,500.

The news comes amidst more pain for people's finances, as inflation rises above 4%, while the Government announced this morning sharp rises in unemployment and the number of people on Job Seeker's Allowance.

According to Zoopla, 38.6% of all properties currently for sale in Britain have had their asking prices cut, up from 37% three months ago and well ahead of the 32% one year ago.

The price cut itself is also more than a year ago, when the average discount from the original asking price was 6.1%.
 
Even properties over £1m, where the market has been the most resilient, have had more price reductions. Of all £1m-plus properties on the market, 27% have had their price reduced at least once, up from 25% three months ago and significantly higher than the 22% one year ago.
 
Sellers in the north are being forced to reduce asking prices by much more than their counterparts in the south. Northern towns and cities dominate the list of places with the highest average price reductions.
 
Sellers in Bolton are suffering the most, having been forced to reduce the original asking price by 8.6% on average, followed by Glasgow (8.2%) and Newcastle-upon-Tyne (8.2%), while other major northern cities like Liverpool are also in the top ten.
 
London has the lowest proportion of price-reduced homes in the UK. Nevertheless, one-third of properties for sale in the capital have had their prices chopped.

In Stockport, nearly half (47.8%) of all properties for sale have been reduced in price since coming on to the market, closely followed by Huddersfield (46.3%) and Chesterfield (45.8%).

(56) Comments

Added by Fun Boy Agent on 2011-08-19 13:05:09

People say I have no sense of irony, I have you know I did the ironing last week
Added by Barry Chuckle on 2011-08-19 11:12:26

@Fun Boy Agent

"any fool can critcise, condemn........"

What delicious irony.
Added by Fun Boy Agent on 2011-08-19 11:07:49

The wingspan of a Boeing 747 jet is longer than the Wright Brothers' first flight. Things move on Sir.

Any fool can criticize, condemn, and complain - and most fools do. Mr Chuckle, do you really know the future? If so, get your insight working for you, soon you will be a millionaire.

Destiny is not a matter of chance, it is a matter of choice, it is not a thing to be waited for: it is a thing to be achieved. I doubt you will achieve much Mr Chuckle.

Road to success is always under construction. What are you building Mr Chuckle?.. Oh! ,,, nothing! I thought so.
Added by Fun Boy Agent on 2011-08-19 10:46:49

Dear Mr Chuckle & Co

Vision without action is a daydream. Action without vision is a nightmare.

Enjoy your daydreams.
Added by Barry Chuckle on 2011-08-19 10:28:18

Now now ladies. Back to the article (heaven forbid).

"More sellers having to turn to price cuts"

Seems like the "bargain hunters" are getting the whip hand over the "delusional boomers" and, judging by the comments below, the "delusional boomers" don't like it up 'em. As the world slides back into recession I expect that whip to be cracked even harder so they best get used to it.

I love the smell of schadenfreude in the morning.

To you.
Added by AceofSpades on 2011-08-19 09:39:38

Wow. What have I missed?!

I really think FTB Opinion should change her/his name to 'AN FTB Opinion'.

PeeBee is right - you WILL be back. I would just like to refer back to one comment though...

"I would like a house and a car, have the funds but can't find a motivated seller for either."

I can appreciate that some houses are over-priced. Certainly NOT every home though and there is definitley value out there, beyond probate.

Now, to cars, if you cannot find a "motivated seller" for a car in today's market then that just confirms your attitude.

You WANT a BARGAIN. Why on earth should a private seller give it to you?

You are tring to mug off private and/or trade car sellers and proft at their expense. There are so many correctly priced cars for sale at the moment and the fact you can't find a "motivated seller" for a car is pathetic.

I suspect you have the same approach for making an offer on a home.

I would love your details, I'd tip First Direct off that you are just wasting their paper, money and time.

Added by Raymondo on 2011-08-18 17:21:42

I've had more than enough of both of you today. ;0)
Added by PeeBee on 2011-08-18 17:10:48

FTB Opinion:

You'll be back, I guarantee it.

You just can't get enough of me! ;o)
Added by FTB Opinion on 2011-08-18 17:04:57

@PeeBee

Stop flirting with me. I'm out of here. Goodnight.
Added by FTB Opinion on 2011-08-18 17:01:14

One last time before I leave you guys to it.

Credit checks done.
Salary confirmation made.
Valuation clearly not done.

Hence offer subject to valuation. Wording exactly as written in their correspondence.

Take it up with First Direct if you object to their terminology. I'm sure they'd love to hear from you.
Added by PeeBee on 2011-08-18 16:57:29

FTB Opinion: "I'm not gonna get drawn into a pointless and frankly embarrassing "argument" with an online blowhard."

YESSS! I've got a title at last! I'm an "online blowhard" - I quite like that.

You missed something, though. Lacks punch. Just needs a little more venom, I reckon. Something VERY relevant to this "frankly embarrassing argument" which, I remind, YOU initiated.

I'm an online blowhard who only has six months left on his mortgage, sunshine!

BLOW THAT! ;o)
Added by @FTB on 2011-08-18 16:54:46

You do not have a mortgage offer, you are just wrong. You have an AIP. Yawn. You will not get a mortgage offer until Val and credit checks and salary confirmations made. More research before opening gob me dear and making yourself look very silly.
Added by FTB Opinion on 2011-08-18 16:41:27

@Fun Boy Agent

Really?

I'm no quid down the line, the bank have examined pay slips, bank statements etc. and are happy. That's precisely why I did the full application, to avoid the scenario you describe.

Jeez, the lack of knowledge amongst you "professionals" is scary.
Added by Fun Boy Agent on 2011-08-18 16:34:41

If you want to calculate your borrowing potential you can use an 'online calculator'. As long as you tell it the truth they are reasonably good tools.

If you want that firmed up because you just got serious about buying, an AIP is the way to go.

Trouble is...

At application stage, when you are will into the transaction (and a good few quid down), the lender asks for your last 6 months bank statements, they then ask what that £30 you drew out in late March was for. You tell them a curry.... rejected.
Added by FTB Opinion on 2011-08-18 16:30:37

@PeeBee

Thaks for the kind words.

Like I said, an offer subject to valuation. I'm not really sure why it's got your blood pumping so much though.

The reason for doing the paper shuffling now is to speed up and simplify the process if/when I have an offer accepted. All that's left is for the banks people to pop round and do the valuation.

Anyway, I'm not gonna get drawn into a pointless and frankly embarrassing "argument" with an online blowhard.

Suffices to say that I'll continue to use my banks terminology rather than yours.

Laters



Added by Sibley's B'stard Child on 2011-08-18 16:11:45

In fairness PeeBee, an AIP can be handy to have; not least as some repos can't be viewed without having one.

Of course, AIP's leave 'tracks' in one's credit rating so not something one should obtain multiples of.
Added by PeeBee on 2011-08-18 15:50:09

FTB Opinion:
Please note...
YOU CAN NOT - REPEAT, NOT - HAVE A MORTGAGE OFFER WITHOUT SURVEY; AND WITHOUT SUBMITTING A FULL APPLICATION, WHICH IS SPECIFIC TO A PROPERTY ADDRESS.

The only person here that thinks you can, is you - and you have apparently never bought or sold a property before.

You simply have an offer in principle. Good for you - what mystifies me, however, is why some berk would go to the bother of getting one when they clearly have NO INTENTION of buying at present, meaning that the paper exercise you have undertaken is even less worthwhile than if you WERE actually going to then make a formal application?

Perhaps you might just want to creep away quietly from this one - it is an argument which can only end one way for you.

Stick to buying a car. At least you won't look AS MUCH of a mug when you kick the four rubber corners...
Added by Fun Boy Agent on 2011-08-18 15:32:33

How do you get a mortgage offer before valuation? I have never heard of that before.

Mortgage offers always come after valuation?

I want one....
Added by rantnrave on 2011-08-18 15:24:52

Meanwhile, the FTSE is currently down over 5%. Things are starting to look like 2008 all over again...
Added by FTB Opinion on 2011-08-18 14:56:51

@Old news

I have an offer subject to valuation by the lender. Not an AIP. I thought it made sense to take the mortgage application as far as possible before making offers on houses.

Thanks for your input though. Yawn.
Added by FTB laughter on 2011-08-18 14:50:40

@Hampshire EA

Agreed. I think that's where all the venom for whinging, risk averse FTB's comes from.

Boomers had become accustomed to the idea that it didn't matter how much they paid for a house, how many little treats they added to the mortgage or that their pensions were shite because a bigger fool would be along to bail them out.

Unfortunately for them todays FTB's seem to be a bit more sensible and the stupid ones are being denied the finance anyway.

Hahahahahahahahahahaha
Added by Brit1234 on 2011-08-18 14:48:09

The market is only going to get worse from here on in. If people rice realistically there are a few of us buyers out there.

Many of us have deposits and costs put aside. Till then I am going to spend my spare cash on gold in the dips and more silver.
Added by Old news on 2011-08-18 14:45:51

FTB You wont have a mortgage offer, you will have an AIP, but since you do not understand that basic it does rather make any other views you express worthless.

Any one else tried this? Dont look at these posts for a month, come back and see its all the same folk posting the same "clever" opinions???
Added by Hampshire EA on 2011-08-18 13:45:56

Whay are the "estate agents" here so keen on high house prices and talking them up? Surely decent transaction volumes is what we want and the actual price is somewhat irrelevant?

I suspect that many of the guys posting regularly on here are actually boomers with BTL portfolios.
Added by Ray Evans on 2011-08-18 11:57:17

@Chris

A very good point and one that could be expanded upon in other cases I am sure. Things are never always as simple as some poorly informed commentators ( a lot on this site) make out.
Added by Chris on 2011-08-18 01:11:47

"Firstly I would point out most EA's with 15 years behind them would not just look single mindedly into the fact 119 sold for £80k and this is the top line,"
Well said Ric.

We faced a similar question from a buyer last week who wanted to know why a bungalow in need of some modernisation was for-sale with us at £145k, when a well presented identical bungalow next door with a conservatory has just sold for only £138k!! How could we/ our vendor hope to sell for anything close to £145k!!

We explained that 2-weeks ago the nice bungalow next door was on the market for £165k and then suddenly they dropped the price to offers over £125k and they sold it 2-days later for £138k. The vendor clearly wanted a quick sale and ditched his asking price to get one, but we feel he sold at a loss. Does this mean that all the other bungalows in the area should simultaneously slash their prices just because one vendor decided to, no of course not, would you we asked. The reply was "No I wouldn't slash my price if I didn't have to."

Yes occasionally there are some bargains out there, but you need to be in the right place at the right time and hope that you are not competing with other buyers for these bargains at the time.
Added by Chris on 2011-08-18 00:52:54

We are a small family business that offers that personal service not often found with the bigger agents. Because we are small and our overheads are small also, we can afford to value correctly and if vendors want to go elsewhere (Because they have recieved a higher valuation) then good luck to them. Since we started in 2004 we have sold over 80% of all the properties we have ever listed and we have listed around 1000 properties! Go for quality, not quantity every time.
Added by PeeBee on 2011-08-17 23:33:54

Unhappy Chappy - you have a BETTER description for them, do you? ;

Even our resident HPCer, rantnrave, has no niceties to offer in defence of them...
Added by Ray Evans on 2011-08-17 19:41:33

Does anyone really care about the opinions of at least 80% of the posters on this site? They are most;y are ill informed, and/or rude.
Beauty.... is in the eye of the beholder
Desire......is in the eye of the beholder
Value........is in the eye of the beholder
Third party opinions are just that - opinions
Supply & Demand will settle all issues on this subject within twelve months.
Added by unhappy Chappy on 2011-08-17 18:22:24

@Reality I I said accept the offer but as I said they live abroad and I think they have 2007 syndrome

@Peebee is it just anybody who does not agree with you who is arrogant or rude. ?
Added by FTB Opinion on 2011-08-17 17:27:32

Cheers Ric

Thanks for the advice. I'll keep banging my head against the wall.
Added by Ric on 2011-08-17 17:21:28

FTB Opinion - Thanks for replying....please no more cold winters....or you will need that mortgage to get a top of the range 4 x 4!

So you are trying, it makes a change to hear from the odd doom and gloomer who reports to be serious about buying on here but never actually will.

Keep viewing, keep offering and one will stick eventually!
Added by FTB Opinion on 2011-08-17 17:09:10

@Ric

Dorset. I want to spend it, that's why I link it to the car anecdote.

I would like a house and a car, have the funds but can't find a motivated seller for either.

As far as the house is concerned I have only seen 2 that even came close to being good value over the last 4 months or so. Both probate sales and unfortunately sold just before I had my mortgage arranged.

I guess I'll just have to hope for a cold winter. JOKE.
Added by Ric on 2011-08-17 16:58:51

FTB Opinion

Where in the UK are you looking to spend your money....and why so far have you found it difficult to find somewhere?

Most are moaning they have not got the money, you seem to be saying you have the money but cant spend it.......is it more WONT spend it?
Added by Ric on 2011-08-17 16:54:21

Afternoon Rant you ask ---- "An EA with 15 years' experience in the business also happens to have a BTL mortgage on number 123 Letsbe Avenue, which he bought for £100K back in 2006. It's a terrace, on a street of identical properties. He gets a phone call from a potential vendor, who so happens to live at 115 Letsbe Avenue. Being a diligent EA, he does some background research and discovers that 119 Letsbe Avenue sold for £80K four months ago. The potential vendor at number 115 says they don't know how much the property is worth - they bought it over a decade ago. What valuation will the EA give?

Firstly I would point out most EA's with 15 years behind them would not just look single mindedly into the fact 119 sold for £80k and this is the top line, it is merely a guide at this point!!!!! as this sale price could be for a number of factors, repo, desperate seller or you never know and just to surprise you £80k may be well over what the agent was going to say! He may have thought thank the heavens, I thought my BTL was about £65k.

Any EA would take a look at much more than one house a few doors down and a sale 5 years ago! So your game is rather like me asking the very same question BUT your number 119 actually got £115k a few months back, more than the £100k in 2006, the buyer of 119 was a wealthy relative of a previous owner who was born in the property and vowed to pay whatever it took to gain ownership of the property once again! (you dont know this but I do and it could happen, odd but it could....)

So Rant, knowing prices on the whole have gone down over the past 5 years, yet now knowing 119 acheived more in 2011 than 123 in 2006 would you now think you need more evidence before deciding a price?

My point basically being easy to throw an example to get a reaction as you opening lines suggest.........but to humour me, what would you do had my example happened?

Added by Chip Douglas on 2011-08-17 16:42:22

@rantnrave

About £120k if my experience is anything to go by.

It won't sell of course but at least the EA can pretend for a bit longer that he didn't buy a lemon.
Added by FTB Opinion on 2011-08-17 16:38:26

Current asking prices are generally ridiculous and everybody know's it. I have a mortgage offer of £180k burning a hole in my pocket and doubt very much that I'll get the chance to spend it before it expires.

Funnily enough I'm also in the market for a new car but cannot get a VW, Renault, Alfa or SEAT dealer to provide even a similar model for a test drive. Looks like I'll end up with an Audi simply because they have cars available to test.

What the hell is going on? Why doesn't anybody want to make a sale? I thought things were slow?
Added by Will Hicks on 2011-08-17 16:35:49

I seem to remember been flamed for pointing out the bleedin obvious over this at the start of the Spring "bounce" [flat thud]. Not seen Jonnie on here lately. Maybe he's gone overseas back to selling time shares.
Added by rantnrave on 2011-08-17 16:33:51

Let's see if I can stir things up a bit here (!):

An EA with 15 years' experience in the business also happens to have a BTL mortgage on number 123 Letsbe Avenue, which he bought for £100K back in 2006. It's a terrace, on a street of identical properties. He gets a phone call from a potential vendor, who so happens to live at 115 Letsbe Avenue. Being a diligent EA, he does some background research and discovers that 119 Letsbe Avenue sold for £80K four months ago. The potential vendor at number 115 says they don't know how much the property is worth - they bought it over a decade ago. What valuation will the EA give?
Added by Chip Douglas on 2011-08-17 16:23:43

"Yep, some agents will deliberately over-value property and appeal to the sellers greed just to get the instruction, then over a period of months, chip away with ridiculous price reductions by which time the property has gone stale."

'nuff said.
Added by moseley on 2011-08-17 15:46:01

I'm amazed it's only 40% of properties reducing the price. There still needs to be a readjustment of prices back to a more realistic level ...... So expect 100% of property values reduced over the next couple of years.
Added by Michael Rye on 2011-08-17 15:27:54

Lies, damn lies and statistics. Listen, for over over 5000 years, there has only been 2 factors that dictate the price of anything - willing buyer and willing seller, that goes for food, property, trinkets etc. The job of the estate agent is to get the property to the market place and using his / her skill, judgment and selling prowess, acheive the best price possible for that property. Acheiving the "best price" (for that is our duty of care) is difficult unless you ask for it first. Yep, some agents will deliberately over-value property and appeal to the sellers greed just to get the instruction, then over a period of months, chip away with ridiculous price reductions by which time the property has gone stale. A good agent will be honest with the vendor, give the owner a fair appraisal of the price using comparable evidence, test the price by taking it the market and letting the market decide on the worth. Just because someone exercises their legal right to try and get the best price, then, with appropriate evidence, adjust that price, doesn't mean it should be used as an inaccurate barometer for the market in general.
Added by PeeBee on 2011-08-17 14:48:03

It's a funny old world...

This story was put up on the LAT site yesterday. The only people who posted were Ray Evans and myself. We had a canny little chat about it - the main point being as Ray states that OVER three in every five property prices have NOT been amended.

So - EAT pick up on our pointing out the error in their ways of including the article in the Lettings section and put it here today. And look what happens - the flood gates open with a dozen happy snapers wanting to argue the toss over whether Agents should be drowned at birth or simply allowed to grow up to be then hung, drawn & quartered!

Why don't you just leave people to get on with their jobs, you lot? With the exception of rantnrave (and a few others who have not yet posted on this story so I will not include them...) you add nothing - you simply display rudeness, arrogance and ignorance, and thereby weaken ANY argument your cause may have. Acting like badly behaved children will get you nothing other than a trip to the naughty step. (oh - and before you waste your time, I am NOT an Estate Agent, so don't launch yet another barrage of cr@p at them thinking it will stick on me as well...)

I wonder when HPC Today will be launched? It HAS GOT to be the next one in your stable, Rosalind... ;o)
Added by Ray Evans on 2011-08-17 14:28:25

@Neo72

Here is another thought....... a vendor could increase their price by 20% with a tag line - offers encouraged. Buyers could then offer 20% less and get a 'bargain'.
All is sunshine!
(This is not as stupid as it may seem)

More seriously though, in my view the main problem is still the availability of loans, to good risks, at a fair interest and deposit. Trouble is that the lenders have not got the money at the moment, so they 'ration' what they have?

P.S.
Is there any other industry that does itself down as much as EA's? Plenty of others (especially on this site) show their ignorance and do it for you.
Added by Reality Check on 2011-08-17 12:47:38

@JakFutures

Honesty, professionalism and eduacated advice? From estate agents? Are you mad?

EA's are sales people pure and simple. Nothing wrong with that but professionals they aint.

Most people realise this but when push comes to shove they let greed take over.
Added by Neo72 on 2011-08-17 12:47:37

@ Ray
Surely the discrepancy (what, 20-30%?) between the Rightmove figures and those from indices actually looking at sold prices e.g. Land Registry give you some indication as to the probablility of selling over-priced tat as compared to more realistically priced instructions.

And another thought: the price-cut ones - perhaps they haven't been cut enough?
Added by JakFutures on 2011-08-17 12:44:09

judging by the irrational justifications posted of over-valuing properties that agents are looking after their own interest, as appose to the needs of the seller.
As to the comments of 'Reality Check' I don't think that its very fair to start calling people 'mad' when most sellers rely on an estate agent for 'Honesty',professionalism and eduacated advice..... and if the property had'nt been over-valued in the first place then they wouldn't be getting stupid offers.
Added by Reality Check on 2011-08-17 11:23:06

@UnhappyChappys

Your relatives are mad, I hope it doesn't run in the family. Their place will be worth 5% less next year due to inflation alone.

Added by Unhappy Chappy on 2011-08-17 10:41:00

I have relatives who now live abroad who have taken there property off the market becuas they received "stupid offers" these stupid offers were roughly 10% below the asking price. I wonder how stupid these offers will look next year....and if this is happening a lot to agents?
Added by Jed on 2011-08-17 10:16:07

38.6% of agents are useless.
Added by Anonymous Coward on 2011-08-17 09:46:54

I refer the honourable gentleman to the answer given before.

The market is weird, I have sold overpriced stock at above asking price and I have stuff on the market that I think looks like a bargain.

No rhyme or reason to it.

I have stated several times before that other agents over-value, so I lose instructions.

Most don't sell - so I have saved money, the other agent has dented his reputation and the vendor either thinks they are an idiot (because the agent overvalued it), or they have done the best they could considering the market (the owner overvalued it).

In the end though, the most successful agent in my town (not me - sobs) is overvaluing, managing his vendors' expectations and is selling houses.

A lot come off the market but a lot are selling too.

Mind you his costs must be astronomical and the stress of dealing with all those unhappy vendors must be incredible.

I would say that my profit levels are probably similar to his - ie. not great.

The difference is that I am worried about my next instruction and how I can best look after my clients.

He must be worried about his huge stock list and how he can reduce his costs.

Neither of us will be going on a long summer holiday this year.
Added by Ray Evans on 2011-08-17 09:22:52

@rantnrave Good morning!

And the price cut ones? They have not sold or they would not be in the 'survey' ;>)
Added by rantnrave on 2011-08-17 09:13:46

Ray - and at the same time, 70% of properties put on the market this year have yet to find a buyer.
Added by JakFutures on 2011-08-17 08:57:14

I really think it is about time agents did start to give honest valuations.
It would help owners know more clearly where they stand with their most valuable asset, especially as things are tough enough in the economy. as it is. More importantly it may give a more accurate picture of the housing market with more predictable trends and fewer people being misled.
Added by Ray Evans on 2011-08-17 08:48:58

NEWS FLASH!

Majority of sellers NOT cutting prices.

Three out of Five properties on the market have not had their price lowered. .
Added by James on 2011-08-17 08:25:41

There is really no surprise here.

The only serious upward pressure on prices, outside of London and the South, in the first half of the year was from Estate Agents competing for fewer instructions.

The policy of over-valuing to win instructions has helped to stall the market - essentially sellers having to come the conclusion over time, that either they were being un-realistic or were given wrong advice by an agent desperate for a job at any price.

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