Buyers are Unwilling to Pay Overpriced House Prices
In a property market like the U.K. where demand frequently soars higher than supply, it's assumed to be a seller's market, however, recent data is showing that buyers might be taking control. We previously reported that sellers were being too optimistic with the price they advertise their home for, it now appears that buyers are being cautious with the amount that they pay.
February is generally a steady month for the property market with a 5 percent spike in property prices but this February has seen the lowest price growth since 2009 with only a 2 percent spike. Sellers were cautioned about overpricing as buyers were becoming more hesitant to pay too much for a property. Subsequently, growth in house prices has slowed to its lowest rate since April 2013.
Why are Buyers Unwilling
England's property market has proven to be more irrepressible than anticipated by experts and the Bank of England, but with rising costs of living, a hint of uncertainty following Brexit and stricter lending criteria – buyers want to know they're getting a fair price.
Rightmove has suggested that potential buyers are out there with a record hitting month of online traffic flow to their website, which has almost 90 percent of properties on the market listed. With more than 130 million visits in January of 2017, data might suggest an increase in property sales. However, data has also shown a decline for three consecutive months of retail sales and this might indicate people are swapping buying for window shopping – or online property browsing – at least until they find the right deal.
The average time to sell a property for February has slowly increased up to 79 days, the same amount as January and February of 2016. Research from Rightmove suggests that the best time to sell your house is in the summer with an average of 57-60 days of days on the market but the right price can make a big difference in days on the market.
Having a fair price on a property is more important than you might think. Although many sellers think that they can list a property high and reduce over time – when your house is overpriced, it loses that immediate interest that people might have when looking for a property. The longer your property sits on the market, the more reservations potential buyers may have about the property, especially if there's a price reduction. In the end, a high price tag can end up costing you in both time and equity.
On a Positive Note
The positive news is that no region saw a decline in property prices for the market of February and a 2 percent jump in asking prices is a welcomed increase after a 2.1 percent drop in December 2016. Regions with high asking prices saw the smallest price growth whilst Wales saw a significant 8.1 percent increase in January.
With the government putting in place their plan to balance the supply and demand in the property market, including building thousands of new homes, buyers are gaining an upper hand in the market. Buyers have the ability to be patient in the face of uncertainty and stricter lending criteria and property prices must reflect their true value for a quick sale.