Price discounting has hit a seven-year high as Rightmove warns that sellers will need to work harder to offload their properties this summer. A second report this morning said transactions are down by 8%.
Rightmove’s July report reveals that the number of properties per branch has reached 52, the highest level since September 2015, while a third of listings have had their price cut at least once since they were first put on the market, the highest level for this time of year since 2011.
The portal says this indicated “initial over-optimism” on price.
Rightmove said there had been an 8.6% annual increase in the number of properties coming to market in July, but no corresponding increase in buyer numbers, with sales agreed down 0.2% annually.
The price of property coming to market in the last few weeks is at a virtual standstill, falling 0.1% on a monthly basis and increasing 1.4% annually to £309,191.
Miles Shipside, director and housing market analyst for Rightmove, said: “At this time of year many potential sellers are more focused on erecting sun umbrellas as opposed to ‘For Sale’ signs, and would-be buyers are equally distracted by their summer holidays.
“So while an increase in seller numbers is a welcome sign of more liquidity in a generally stock-starved market, it has unfortunately come at a quieter time of year.
“Prospective buyers will need tempting with a summer special price or a beautifully finished and presented must-have home, and sellers whose homes tick these boxes then need an estate agent with good marketing skills to promote it effectively.
“A reduction in asking price is often a sign of initial over-pricing by estate agents and sellers, and whilst a price cut can boost buyer interest you have to overcome the negativity that arises when a property has not been snapped up quickly.
“Our research shows a much-increased chance of a quick sale if priced sensibly at the outset, and in contrast if over-priced initially it often means a price reduction to a lower level than if it had been more accurately priced from the beginning.
“It can also be a sign of a falling market, where the gap between asking prices and what buyers are now willing to pay has grown.
“With more price reductions at this time of year than in any of the last six years, there is likely to be a combination of both initial over-pricing and failure to react fast enough or reduce by enough when initial buyer interest fails to lead to a sale.”
Separately, the new house price index from Your Move – also out this morning – said the annual rate of house price growth rose for the first time since the middle of last year during June.
It says property values grew 2.1% annually on average, up from 1.8% in May.
Average prices were similar to Rightmove’s new asking prices at £303,960, up more than £6,000 on June last year but down 0.2% on a monthly basis.
Your Move reported that sales were down 8% annually in June.