I’ve been trying to think why the gap between Rightmove asking prices and what the ONS tells us is the average sale price, swings around as it does.
Can the difference really be as much as 30%, up from nearer 20% 15 years ago?
The straightforward answer is no, despite some commentators out there trying to persuade you that it’s because people are negotiating.
Bear in mind these are against final asking prices too.
In the same way that simply dividing the number of buyers registered with agents by the number of properties available tells you how many buyers are “chasing” each property, simply averaging asking prices on Rightmove and using them to benchmark average selling prices is blunt at best.
This gap in average asking prices and actual selling prices takes no account of the fact that many properties marketed don’t sell (quite possibly as many as 50%) for whatever reason; that circa 10% are the speculative ones marketed in time honoured fashion by agents at a “I’ll sell if you get me that” price; and that many still doubt the efficacy of the ONS stats overall.
Recently the gap seems to have got wider.
This could be because competition amongst agents has forced asking prices up or perhaps online agents have been more prevalent in the stats and perhaps rely on owners’ expectations.
It could also be because Rightmove’s stats don’t take multiple agencies into account, so there’s quite a bit of double counting.
Whatever the reason, it’s yet another stat to be grasped and used to an interested party’s advantage when the actual basic facts remain irritatingly beyond proof, as usual.
Ed, I am no statistician but I guess not all ‘sales’ on the Land Registry are sales but transfers of ownership, whether in whole or part. There are many reasons for this, as you will be aware, and the price may not therefore be the full market value. This of course will distort the figures.
It is really a job for the radio 4 programme More or Less!
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Agents are over valuing to win stock at a time of low volumes…toxic mixture especially when adding in a commission war to boot! The properties with lots of comparable evidence are where the market is at the moment i.e. urban/suburban
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“Bear in mind these are against final asking prices too.”
With respect to Mr Mead, I would have to disagree.
Rightmove’s infamously misleading “average asking price” that they so fondly spurt forth every month/whenever-asked is the figure on that day or the last day the data was analysed. It is also based on a flawed methodology.
I’ve just knocked around £300 off the mythical “average asking price” – just by taking all of the multi-listings on pages 1-3 of a search for “London” out of the equation. Eleven out of 75 ‘duplicates’ of other listings at an average price of close to £27 million. Have a look yourselves – if I’m wrong I’d like to know about it.
“This gap in average asking prices and actual selling prices takes no account of the fact that many properties marketed don’t sell (quite possibly as many as 50%) for whatever reason…”
WELL… based on what I’ve shown above, even if ALL of the 22 properties I have highlighted sell, only 50% of them will become Land Registry data – and the other 50% will be a convenient statistic for those with agendas.
A certain Mr Pryor and I have a long unfinished score to settle on this thorny subject… ;o)
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Miles Shipside kindly responded to this article so if anyone wants to read it go to http://ed-mead.com/blog/rightmove-respond-to-my-ap-vs-selling-price-piece – couldn’t work out how to put table in, sorry Ros!!
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