As spring turns to summer, the market in our area of prime London remains relatively buoyant. Average values achieved so far this year are almost 13% higher than they were a year ago, with the number of properties sold up 17%. Despite the strong market conditions and vendors continuing to benefit from the number of potential buyers outpacing new instructions, it is vital that both vendors and agents are realistic about the value their properties can achieve. As competition for new instructions has intensified, some agents are overvaluing in a bid to secure instructions; a practice that is not recommend.
Put simply, vendors who achieve the best price for their property do so by bringing their home to market at the right price, creating early interest amongst buyers. Properties that are launched at an unrealistically high price are missing out on crucial selling opportunities in the early stages of marketing. The average amount of time before a property is first reduced is currently 70 days.
Unrealistic expectations of values alongside competition for new instructions means properties are still reaching the market at values that are not attracting buyers. Within the Royal Borough, 24% of properties currently on the market have been reduced in price since they were first marketed. The highest proportion of price reductions is seen in the price bracket over £10 million (31% now reduced); this compares with just 21% of properties priced at £2-5 million.
Within our area, 25% of the most prolific agents (with more than five properties listed for sale) have reduced the prices of more than a third of their available stock. Comparing properties sold this year at different price bands shows that the market of over £5 million saw the highest levels of price reductions, with 36% of properties having their asking-price reduced before finding a buyer. This compares to just 15% of properties over £5 million sold in 2013. For properties under £5 million, 22% had seen their asking prices reduced before finding a buyer.
Source: Lonres – Crayson market area