Sellers reducing asking prices by how much

While the headlines have been predicting a property price crash, the market has experienced incredible resilience this quarter. Whether this is down to sellers not having smelt the coffee yet, or a genuine rebound in market sentiments, only time can tell.

We have seen landlords with tenants-in-situ being the ones most motivated to accept a lower offer. On the other hand, homeowners with large amounts of equity in their homes are those that are holding off on the decision to reduce prices.

Properties that are dilapidated or potentially unmortgageable are the ones that are starting to fall out of favour with DIY enthusiasts, as material and labour costs have gone up significantly, making it less attractive to fix a doer-upper. These properties are trading typically 10-15% below their full market value, once done up.

Over the last 6 months, we have bought multiple properties for £160,000 or less, which would have sold for £200,000+ in the heydays of Rishi Sunak's stamp duty bonanza.

We are starting to see sellers drop some of their asking prices significantly, typically between 5%-10%. There are two types of sellers, the ones that are holding out on the value that they would have got last year and these sellers have been on the market for quite some time. The others understand that there aren't as many buyers out there and are happy to negotiate on price so I find their properties have sold fairly quickly. One prime example was a house purchase I helped with yesterday in Manchester. It had been on the market for a few months, was on for offers over £265,000, and sold for £250,000. These are significant price reductions and very positive news for first-time buyers.

Currently, most property is being sold at under the listed price, anecdotally offers of around 2-5% under are typically what I am seeing, although some are larger and sometimes it happens in two stages; so a price is agreed upon and then the buyer renegotiates a further reduction a few days or weeks later. Motivated sellers will accommodate this, as they are often doing the same on the property they are buying themselves. You will always have some who are objectionable to a discount from the sale price, generally, they don't really want to sell but are being forced to for some reason, such as a marital breakdown, or financial pressures.

In South Glos, we're finding the owners of small and medium-sized properties are more likely to reduce their asking prices, typically by 2-5%. Vendors of larger properties less so, perhaps as they have large amounts of equity or are unencumbered and don't necessarily need to sell quickly. That said, the longer you take to sell in a falling market, the less you're likely to get for it. Of course, reducing your asking price a few percent is one thing, the final sale price can often end up being much lower. Many homeowners still havn't woken up to the fact property values are falling, and the pace of those falls is likely to accelerate over the coming months

What we are seeing is some agents being more realistic with what price they list a house and telling clients what they need to hear whilst others desperate for market share overvaluing properties by £50 to £100 thousand to 'win a listing' then having to reduce the price later when the vendor is wondering why their house hasn't sold. This is silly on the part of the agent as they incur a lot of cost that won't be recouped and not ideal for a vendor as they waste the buzz that their property being new to the market tends to generate.

This points to an interesting problem for estate agency. We had 3 years of a runaway housing market where it was easy to find a buyer and as such a lot of new agents set up business. I'd expect to see a fair few estate agents who have little experience of a tougher market disappear over the coming months as unless you sell your listings, you aren't getting paid.

We have seen a few price reductions for those that want to move quickly. However, this seems to be less common for higher-value properties above £2m, where demand is still strong.