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Homes Fail to Hit Asking Prices

In January, almost three quarters of all homes sold failed to achieve the seller’s asking price. These figures, from the National Association of Estate Agents (NAEA), show that 73% of homes were sold below their asking price last month. This is a significant jump from even a few months ago, when in December the figure was at 56%. However, the January figure is still below that seen during the second half of last year – 82% of homes failed to achieve their asking price in November and September of 2014.

According to the NAEA, the rise is evidence that “buyers have the power to negotiate again”.

The January rise may have been in response to the reforms to stamp duty, pushing some sellers to increase their asking price. Those selling around the £250,000 and £500,000 thresholds in particular were handed tax cuts, so they raised their prices.

Managing director of the NAEA, Mark Hayward, said, “It seems buyers are counter-acting this by negotiating prices back down to the original asking price opposed to paying over the odds for their dream home, creating a real buyers’ market.

The housing market is based solely on sentiment and so if consumers feel an ounce of uncertainty; this will result in a temporary lull.

The amount of sales we’ve seen going through at less than asking price in January is reflective of vendors’ lowered expectations and keenness to achieve sales – buyers are just not biting at inflated prices. Traditional estate agents are still working hard to ensure speedy transactions for both buyers and sellers.”

The NAEA also reported a slight slowdown in buying and selling activity, too. The number of available properties was down to 44 per member branch, compared to an average of 47 per month in 2014, and the number of house-hunters registered on agents’ books has dropped gradually since September last year, reaching 353 buyers per branch. Number of sales agreed had risen since December to an average of 8 per branch. This slump in interest could be attributed to the uncertainty of the general election in May, according to the NAEA.

The percentage of sales made to first time buyers was at 26%, the same in January as it was in December, a slight rise on the 24% it was in November. 18-30 year olds accounted for 39% of first time buyer sales and 31-40 year olds accounted for 44% in January, fluctuating slightly from December.