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Buyers and sellers in house price stand-off

Buyers and sellers in house price stand-off

Category: Mortgages

Updated: 27/04/2011
First Published: 27/04/2011

MONEYFACTS ARCHIVE
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A stand-off looks set to emerge in the housing market because overly optimistic home sellers are pricing their properties too high for potential buyers who are struggling to secure a mortgage.

A clear mismatch between seller expectations and what buyers are willing to spend has become apparent.

Estate agents this month reported the biggest jump in four years in the number of properties that they have on their books which remain unsold.

Yet despite the lack of sales being made, new sellers continued to increase their asking prices, raising them by 1.7% over the same period.

Around half of people questioned said they thought prices in their local area were over-valued.

However, with the number of people who expect prices to remain about the same increasing for the seventh quarter in a row, the suggestion is that prices will level out rather than rise further or fall.

"There is a growing sense that many homes coming onto the UK housing market are priced too high," said Miles Shipside, director of the property website.

"We now have a situation where half of the UK public feel house prices are too high, yet three quarters of the same public are expecting prices to either stay the same or increase over the next 12 months.

"This suggests the prospect of a market stand-off and rising unsold stock levels if sellers don't wise up to the house price views of their target market."

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