As economic fundamentals continue to worsen, the gap between selling and asking prices is widening. In the North vendors are accepting the lowest offers - averaging 12.5 percent below the marketed price. Vendors in the North West, East Midlands, West Midlands and Wales are accepting offers averaging approximately 10 percent below but in London the figure stands at 8.5 percent. London has remained firmer than most as its diverse economy and large job market offers sellers more room for optimism. Interestingly, Scotland has yet to be affected (where the gap is only 2.4 percent) but price falls in this region have lagged significantly behind the rest of the UK and it is likely that the gap will widen in the coming months.
In the North West, the majority of vendors accepted lower asking prices with 82 percent of Chartered Surveyors reporting that the gap had widened while in the West Midlands 75 percent reported a widening gap. More surprisingly the gap did not appear to widen in London in August with 67 percent of Chartered Surveyors reporting no change.
Commenting, Simon Rubinsohn, RICS chief economist said: "With housing transactions currently at a 30 year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up. In recent surveys, Chartered Surveyors have reported that some buy-to-let investors are re-entering the market to take advantage of rising yields. In addition, ‘predatory buyers' have been hovering over the corpse of a stalling market with many others cut out by the lack of mortgage liquidity.
"The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible. The London market could be adversely affected as employment in the financial sector drops off."
