Overpriced UK Homes Can Take Four Times Longer to Sell, Savills Says
Key Takeaways
- •British properties requiring asking price reductions can take up to four times longer to sell than those priced accurately from the outset.
- •One-third of property sales in Britain involved at least one asking price cut, while 11% needed two or more reductions to complete.
- •Accurately priced properties typically sell within 28 days, but two price reductions can extend the selling timeline to approximately five and a half months.
- •Sellers reduced asking prices by an average of 4.4% per cut, with those making four reductions seeing eventual sale prices fall 15.4% below the initial listing price.
- •London's wealthiest areas have been hit hardest by the market slowdown, with house prices dropping 22.8% in Westminster and 10.7% in Kensington and Chelsea.
Property sellers in Britain who set asking prices too high and later have to reduce them can take four times longer to sell than those who list at an accurate initial price, according to new research from estate agent Savills.
The findings come as buyers face a higher mortgage rate environment following the Bank of England's cycle of interest rate increases, which has put pressure on affordability and made purchasers more price-sensitive.
Savills said 33 per cent of sales required a cut to the asking price before the property left the market. In 11 per cent of sales, the initial price was reduced two or more times.
According to the estate agent, sellers who price their property accurately at the outset can expect to sell within 28 days. But one price reduction increases that period to 100 days, while two cuts can extend the time needed to reach an offer to almost five and a half months.
Lucian Cook, residential research director at Savills, said the data “tells us that the more you misprice the property, the more protracted the sale process will be.”
“What this reveals is how important it is to get your price right. We know that everybody’s natural inclination is to go to the top end of their range of values, because this is your biggest asset,” Cook said.
Sale prices fall after asking-price cuts
Savills found that sellers who are forced to reduce their asking price cut it by an average of 4.4 per cent each time. More than 20 per cent of sellers needed to lower their initial price once in order to complete a sale.
At the upper end of the scale, sellers who cut their initial asking price four times saw the eventual sale price fall by 15.4 per cent in total.
The findings follow data from the Office for National Statistics released on Wednesday, which showed that house prices in the City fell again in the year to May and were down 3.7 per cent to £545,000.
Properties in London’s wealthiest areas continued to be among the hardest hit by the market slowdown. House prices dropped by 22.8 per cent in Westminster and by 10.7 per cent in Kensington and Chelsea.