Despite evidence of a price gap, only one in four expects prices to be lower in 12 months’ time with growing evidence of ‘price scepticism’, as one in five of those predicting prices will be higher a year from now cite ‘overpricing’ as the main reason.
Rightmove’s latest Consumer Confidence Survey of nearly 40,000 home-movers finds that around half (49%) of people planning to buy in the next 12 months are of the view that current house prices in their local area are above what they consider ‘fair and reasonable’. By comparison, only around a third (36%) of those expecting to sell holds the same view.
Miles Shipside, director of Rightmove, said: “A difference of opinion on price between buyers and sellers is nothing new as both are obviously keen to protect their own interests – not to mention pockets. However, unless both parties are able to bridge the price gap, then a stand-off situation ensues leading to lower numbers of successful sales.
“Naturally, sellers have an interest in standing their ground in order to achieve the best price but in the current housing market, where sellers outnumber successful buyers by around two to one, sellers need to lower the price or increase the perception of value to avoid being outflanked by their competition. First impressions are vital, and if a prospective buyer’s first impression is that a property is over-priced, they may not take their interest any further.”
Despite the valuation mismatch between buyers and sellers, only a quarter (24%) of home-movers expects property prices to be lower a year from now. Indeed, with seven out of ten expecting prices to be the same (40%) or higher (30%) one year hence, there is little evidence to suggest the gap will close any time soon.
Shipside added: “If you are selling through choice then you are perfectly entitled to stand your ground on price and wait to see if a buyer comes along.”
