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House sellers in asking price rise surprise

House sellers in asking price rise surprise

Category: Mortgages

Updated: 18/10/2010
First Published: 18/10/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners trying to sell their property are struggling to adjust to new market conditions, according to new data.

The latest survey by Rightmove found that the average property asking price was more than £7,000 higher in October than in September at £236,849, despite conditions in the market suggesting a drop in prices might be more likely.

With the number of properties for sale reaching near-record levels, and buyers still experiencing difficulties in securing a mortgage, the property website said it was 'seemingly illogical' that asking prices could have increased by 3.1% over the last month.

Explaining why it thought sellers might have been tempted to raise their asking price, Rightmove said that bullish pricing was a normal characteristic of the autumn selling season, with prices having increased every October for the past decade.

It added that sellers were also struggling to react to the increased amount of properties for sale due to either an unwillingness or an inability to adjust to the new conditions.

Speculative sellers were also thought to have played a part, with some people taking advantage of the reduced cost of putting their property up for sale now that home information packs have been scrapped.

"Given the challenges of the current market, the behaviour of sellers in raising their average asking prices by over £7,000 takes some explaining," said Miles Shipside, director of Rightmove.

"Every year, vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in a new home before Christmas."

Between 2007 and 2009, October sellers tried higher prices in spite of the housing market being hit by the credit crisis, and it seems to be a habit that is proving hard to kick, even though the Government's comprehensive spending review is to be revealed later this week.

"It's not likely to be a successful tactic, though it is a sign that many sellers are not experiencing high levels of financial stress but can't afford to accept a lower price if they are to make their sums stack up for the next move," added Mr Shipside.

Despite mortgage deals not being as freely available as they once were, there are still some competitive deals available if you search hard enough.

Providers such as HSBC, first direct, ING Direct and Northern Rock are all offering some competitive mortgage deals at present.

Meanwhile, for first time buyers, Yorkshire Building Society has a number of mortgage deals available to borrowers with only a 10% deposit. Northern Rock and first direct are also offering deals to those with a 15% deposit.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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