House asking prices dropped by a country-wide average of 3% in the last month, according to property website Rightmove, which warned sellers may have to slash their prices by a further 5% next year.
Rightmove analysis states that the average property asking price fell by nearly £7,000 to £222,410 in the four weeks preceding December 4, the biggest December fall since the 3.2% drop since the collapse of Lehman Brothers in 2007.
The latest drop left this year’s asking prices in stagnation, up by just 0.4%. Rightmove also predicts that just 600,000 people will manage to sell next year, a massive drop compared to boom years where approximately 1.7m homes were sold.
Rightmove says it expects asking prices will have to be cut by up to 5%, or even more in the worst hit areas. This means that if you think your home is worth £150,000, you will have to lower your expectations by £7,500.
Miles Shipside, director of Rightmove, said: “Sellers are going to have to price more competitively in 2011. Our figures show that asking prices have already dropped by 6.4% since June, wiping £15,350 off the average in England and Wales. Asking prices have now fallen in five of the past six months.”
For those urgently looking to sell their property, this dwindling level of sales is a huge barrier, particularly if they are on the brink of falling into negative equity which is a growing concern for the UK public.
“It is already taking an average of 100 days to find a buyer, and this is likely to keep on rising. Some parts of the country will escape the homeselling crisis,” Mr Shipside said. “These will be areas such as central London and Surrey where demand is high, many buyers do not need a mortgage and few people are forced into selling for financial reasons.”
