Home sellers’ expection of the price they will be able to obtain when selling their property is lowering, reports the Rightmove June House Price Index.

Last month new sellers coming to the market reduced the average national asking prices by 1.2% (£2,936), the first fall Rightmove has measured in the month of June. The fall means that homes
are becoming more affordable for buyers, who are being increasingly stretched by rising inflation and
mortgage rates.

Miles Shipside, commercial director of Rightmove comments: “In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied the laws of economics. Thankfully, new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers.

It is essential your property stands out over your competition, especially with a property to buyer ratio of 15 to 1. Sales are still happening, and there is a pent-up demand for the right properties at the right price. The homes that are in special locations, have strong character details or an immaculate finish are still popular if priced realistically. Run-of-themill homes that are not much different to others on the market have to stand out as bargain buys, and badly presented homes have to be really cheap.”

Rightmove found that the widening gap between some sellers’ asking price aspirations and what buyers are willing or able to pay is one of the factors behind the illiquid property market and low volumes of transactions.

Getting serious about attracting buyers through more realistic pricing now appears to be more firmly on sellers agendas, after months of denial. Most sellers will still benefit from large equity gains, however, further reductions in asking prices will be required for properties in over-supply, as buyer
affordability is still deteriorating against the wider economic backdrop of the average cost of
living outstripping wage rises and the upwards spiral of mortgage rates.

Rightmove found the restrictions on mortgage availability is giving sellers an additional challenge, as the number of readily mortgageable buyers they can target has been severely restricted. Evidence of the challenge facing sellers is research from Rightmove showing the doubling of the ratio of properties for sale to successful buyers. The number of properties for sale has now breached the one million mark, contributing to the ratio of 15 properties for sale for every successful buyer. Last year saw an average of 7:1.
Mr. Shipside added: “Lenders are trying not to lend right now and are just cherry-picking for profit. With approximately half the mortgage funds available, homes have to stand out to attract the half of buyers that can still buy. For most sellers that will mean whatever they thought of asking for their property at the peak of the boom, they need to take at least 10% off. Otherwise, their property will stagnate.

After a decade of relatively easy selling conditions, motivated sellers and their estate agent need to act together to ensure their property has the power to attract that one buyer away from the other 14 competitor homes. Many estate agents were not in the market in the early 90’s downturn and in the meantime, new technology and resources have emerged to fundamentally change successful sales techniques. The transparency and reach of the internet means buyers are much more informed, and with one million properties for sale at the moment, all of which can be easily accessed online, there is no hiding if your home is not properly priced and marketed.”

Average unsold stock per estate agency branch continues to rise to new record levels, to 75
homes per branch from 73 in the previous month. Rightmove said that not only is this the highest ever in June, it is the highest figure the group has ever recorded. Against this level of competition and given the difficult economic background and low level of transactions, sellers and estate agents need to ‘sell their way out’ of this downturn by being very pro-active.

Giving some final advice, Mr Shipside said: “Sellers need to discuss the 3 P’s - Pricing, Presentation and Promotion, with their agent. Pricing has to be below the competition and presentation of their property has to be the most attractive on the street. Having got those two basic elements right, it is then crucial to promote the property to really stand out from the rest. Estate agents now have to market like pro’s and sellers have to provide them with the right raw material.

Once you’ve sold, this is a great market for trading up; with opportunity to negotiate a reduction on the one you are buying and moving into a soughtafter area where there is normally restricted choice.”