Asking and selling price gap grows

By Jonathan Dawes, Mon 29 Sep 2008 - Published in Mortgages

The gap between the asking and selling prices is increasing, new research has suggested.

According to the Royal Institution of Chartered Surveyors (Rics), UK mortgage holders are buying homes at an average of nine per cent below the asking price, while some regions are seeing sellers put a discount of up to 12.5 per cent on their property.

The research discovered buyers in the north are receiving the greatest discount, while those in the north-west, east Midlands, West Midlands and Wales see an average of ten per cent knocked off house prices.

However, sellers in London are accepting 8.5 per cent less than the asking price, with those in Scotland providing discounts of 2.4 per cent.

Simon Rubinsohn, Rics chief economist, commented: "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."

He also claimed 'predatory buyers' have entered the market to take advantage of stalling conditions, while buy-to-let investors have returned to maximise increasing yields.

Last week, John Heron, managing director at Paragon Mortgages, said there is still a "long way to go" before the property market fully recovers from the credit crunch.

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