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The penny drops for house sellers - along with asking prices
November 28th 2008
In what appears to be a major reality check for house sellers across Britain, asking prices have plunged by an average of £17,000 in the past two weeks, according to new figures.
With the economy continuing to decline, and no end in sight to the downturn in the housing market, sellers are finally accepting that they need to re-price their properties to reflect the realities of the market if they hope to make a sale. Many are also desperate to secure a sale in the run-up to Christmas.
Figures from Halifax show that house prices have fallen by more than 15% since their peak in August 2007, and some experts predict a fall of 35% in total.
Sellers who had earlier refused to budge have had to reverse their position, and asking prices have tumbled across the country, with a national average fall of £16,941, or 6.5%, in the last fortnight, according to property search engine Globrix. There were regional variations, with cuts reaching £13,777 (or 8.2%) in Nottingham; £9,041 (6.5%) in Glasgow; and £15,547 (6%) in Cardiff. London saw the biggest cuts, by more than £100,000 in wealthy areas such as Kensington, Chelsea and Westminster, and by £11,213 in more inexpensive areas such as East London and Newham.
For some, this is a buyer's market. Daniel Lee, director of Globrix, said: "There is no doubt that now and the months ahead are a great opportunity for cash buyers and people with the finance in place to move quickly.
Buyers are now in complete control and sellers are finally understanding that if they want to sell in this market then they may have to accept an offer they wouldn't have even considered six months ago."
However, many first-time buyers cannot take advantage of the lower prices as lenders continue to refuse granting mortgages and home loans to those without a large deposit. With the continuing fall of mortgage approvals, and with every sign that potential buyer interest will weaken further in the coming months, sellers are desperate to sell quickly at a lower price rather than risk even worse conditions ahead. Another option they have is to make a guaranteed, rapid and fair sale to a home-buying company, which puts them less at the mercy of market forces and allows them to set their own schedule.
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