Rics: Gap widening between asking and selling price

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by Kay Murchie

According to the Royal Institution of Chartered Surveyors (Rics), properties throughout the UK are selling at well below the asking price.

As the property market deteriorates, vendors are accepting offers, on average, 9% below their advertised price, in order to get the property off their hands.

In the last year, property prices have fallen by 11%, according to reports from major lenders.

Meanwhile, Nationwide’s chief executive, Graham Beale, recently suggested house prices might fall by 25% from their peak in August 2007.

Simon Rubinsohn of Rics explains that housing transactions are currently at a 30-year low so sellers are being forced to lower their asking prices to achieve a sale. Many are being forced to rent until the situation improves.

The latest research from property and letting agent, Your Move, shows that demand for rental property rose by 76% in the 12 months to the end of July. The increase is primarily due to the fact that potential buyers are delaying purchasing a property until house prices stabilise.

According to Rics, the smallest gap between asking and selling price was in Scotland where house prices are still rising. However, in the North of England, the discount between asking and selling price was the biggest, at 12.5%.

Meanwhile, homesellers in Wales, the West Midlands and East Midlands, and the North West were accepting offers, on average, 10% under their asking price.

The gap is smaller in London, at 8.5% and according to Rics, this is because the economy in London is more diverse, with a large jobs market. However, this could change as employment in the financial sector tails off.

Finally, Rightmove reported in June that there are now over one million homes for sale in England and Wales.