Sellers drop asking prices in attempt to keep buyers on board

An estate agency says 10 per cent of its sellers have already dropped their asking prices to keep buyers on board, as fears grow of fall-throughs approaching the stamp duty holiday deadline.

London agency Chestertons says many sellers with properties currently on the market have reacted to the growing public awareness that transaction times are slow and purchasers may lose up to £15,000 by completing after March 31. 

During last month alone one in 10 Chestertons sellers dropped asking prices, while supply has boomed - the agency currently has nearly 50 per cent more properties for sale compared to January 2020.

This comes as Rightmove suggests that across the market as a whole, the proportion of property sales that fell through last month was seven per cent higher than in January last year. The portal says this could be an early sign of some of those deals falling through because buyers and sellers now realise they won’t meet the stamp duty holiday deadline.

Meanwhile Chestertons also reports that buyers returning from the Christmas break continued to snap up properties and push purchases through to completion in January, with latest figures showing that 12 per cent more purchases were agreed over the last month compared to January 2020.

However, while there are more sales being agreed, the stricter lockdown measures have discouraged many would-be buyers from entering the market and Chestertons saw the number of new buyers registering drop 23 per cent compared to January 2020.

Guy Gittins, the agency’s chief executive, says: “It is clear that the unprecedented levels of buyer activity that we saw in the second half of last year has cooled. This is primarily due to the stricter lockdown measures discouraging people from continuing their search and the fact that the chances of beating the stamp duty holiday deadline is now slim for those that have not yet found a property.

“However, the extraordinary amount of buyer interest we saw towards the end of last year is still converting into record levels of agreed sales as people are pushing hard to get the purchase completed as soon as possible in order to take advantage of the stamp duty saving and to enable them to adapt to the current circumstances. There is clearly still a lot of confidence in the market and a lot of people wanting to move and we are very confident that the market will pick up very quickly once lockdown restrictions start to relax.”