Housing market stalls as sellers fail to grasp new pricing reality

The UK housing market dragged its feet in June as demand failed to pick up and supply of new property fell back, the RICS reports this morning.

Meanwhile, property organisation Move With Us claimed that 56% of properties on the market are overpriced.

The firm said that while an average house is taking 78 days to sell, “hundreds of thousands” of properties are stuck on the market, with minimal interest, for far longer.

Robin King, Move with Us director, said: “Inaccurately valued property is one of the most problematic issues in the current market.

“These exaggerated prices lead to stagnation and price reductions become the most common outcome to try and stir up some interest. More often than not, agents value the property at an inflated price to win the business and then have to backtrack on price further down the line, creating frustration and disappointment for sellers.

“Our experience in selling property has shown that using the best agents in the area on a multi-agency basis to value the property accurately, from the start, means that the property is sold in realistic timeframes and sellers’ expectations are upheld.”

Chartered surveyors in this morning’s RICS report echoed the views.

The RICS said there are indications that sellers are now holding off from putting their properties on the market.

Some surveyors also said that seller expectations are too high, and that sellers have not realised that the market has changed.

Jeffrey Hazel, of Geoffrey Collins & Co in Kings Lynn, Norfolk, said: “Many vendors are still unable to accept that values have fallen, and too many agents are still giving inflated market appraisals.”

Philip Hiatt, of Your Move in East Grinstead, West Sussex, said: “Buyers will buy, but at their price, not the vendor’s, and many promising offers from serious buyers came to nothing as vendors seem reluctant to acknowledge that the market has changed again in June. 

“Uncertain days lie ahead for the property market.”

The average estate agency office sold just 14.8 properties in the three months to June.

RICS housing spokesman Alan Collett said: “The housing market was pretty flat during June. Buyer interest in purchasing property remains relatively low across much of the UK and the volume of new stock coming to the market has slackened.

“With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue. London, however, remains a market apart, with both sales and prices showing a greater degree of resilience.”

Although the RICS survey is tiny – this month, there were just 272 responses, covering 405 offices – it is highly influential, and taken into account by the Bank of England when fixing interest rates.