MARKET: Over-priced homes taking a month longer to sell

Buyers remain price sensitive with homes that are over-valued taking twice as long to sell, it has been claimed.

Zoopla’s latest house price index includes the claim, which tells vendors that they should remain realistic on pricing if they “serious about moving home”.

The portal says buyers remain cautious after seeing their purchasing power eroded by higher mortgage rates and that, despite higher wage growth and the recent cut in the base rate, there is some way to go before confidence is completely restored.

“This explains why 20% of homes had the asking price reduced by 5% or more in August to attract greater buyer interest,” the reports says.

“We find it takes 28 days to agree a sale where there has been no asking price reduction but sales take 73 days where the asking price has been cut by five percent or more to attract demand.

Confidence building

Richard Donnell, Executive Director at Zoopla, says: “Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale.

“Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check but they have less purchasing power than two-to-three years ago and remain price sensitive meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home.

“If vendors need to cut their asking price by 5% or more then their home will take twice as long to sell or may not sell at all.”