Houses are now selling at an average of 9% below asking price, with sellers in some regions having to settle for 12.5% off their original advertised price, says the latest report from the Royal Institute of Chartered Surveyors (RICS).
The gap between selling and asking prices continues to widen across the country, says the report, with vendors in the North accepting the lowest offers of 12.5% below asking price, while in the North West, East Midlands, West Midlands and Wales buyers are accepting offers averaging around 10% below, although in London the figure stands at 8.5%. RICS says London is staying firmer because of its diverse economy and large job market. The report also points out that Scotland is yet to be affected, but expects that the same effect will follow in time as the market lags that of England and Wales.
‘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,’ said Simon Rubinsohn, RICS chief economist.
‘In recent surveys, Chartered Surveyors have reported that some buy-to-let investors are re-entering the market to take advantage of rising yields. In addition, ‘predatory buyers’ have been hovering over the corpse of a stalling market with many others cut out by the lack of mortgage liquidity.
‘The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible. The London market could be adversely affected as employment in the financial sector drops off.’