Property is selling at an average of 9% below the asking price with sellers in some regions being forced to accept as much as 12.5% discount off their advertised price, says a report published today by the Royal Institution of Chartered Surveyors.
In the North of the country vendors are accepting the lowest offers, averaging 12.5% below the marketed price, the survey found. Vendors in the North West, East Midlands, West Midlands and Wales are accepting offers averaging approximately 10% below.
But in London the market is firmer with selling prices just 8.5% below. The slightly better performance is put down to its diverse economy and large job market offering sellers more room for optimism.
Interestingly, Scotland has yet to be affected. There the gap is only 2.4% but price falls in this region have lagged significantly behind the rest of the UK and it is likely that the gap will widen in the coming months, RICS says.
'With housing transactions currently at a 30 year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up,' said Simon Rubinsohn, RICS chief economist said.
'In recent surveys, Chartered Surveyors have reported that some buy-to-let investors are re-entering the market to take advantage of rising yields. In addition, predatory buyers have been hovering over the corpse of a stalling market with many others cut out by the lack of mortgage liquidity,' he added.
And nothing is likely to get better soon. 'The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible. The London market could be adversely affected as employment in the financial sector drops off,' concluded Rubinsohn.
