Asking prices are being reduced right across central London.
LonRes, which provides a platform for the large majority of agents in London, says that price reductions are by volume 20% higher than a year ago.
The size of the price reduction has also risen – from 4.7% pre-referendum to 5.1%.
A number of sellers have withdrawn their homes from the market, with 59% of agents saying that not achieving expected prices was the main driver.
Of those properties withdrawn from the market after the referendum, one in six had come back on to the market by last month.
Of those properties which had been withdrawn and then come back, 37% were for let rather than for sale.
Of those properties re-listed for sale, two-thirds were back at a reduced price.
Reporting on the third quarter, LonRes says that 81% of agents saw an increase in price reductions, while the average reduction negotiated off the asking price was 10.8% – ie, more than the average vendor was prepared to reduce their price by.
More than half of agents (56%) reported an increase in the average time taken to sell.
In the lettings market, there have also been reductions on asking prices, with a 9.4% discount negotiated on the initial asking price rent.
William Carrington, chairman of LonRes, said that the Brexit vote has had “little impact on an already depressed property market”.
Comments (6)
Is there any point is mentioning that this is the natural consequence of flawed algorithm valuation systems? I posted this would happen in 2012 , posted graphs of the extent of the problem in June 2015 and have posted here that falls of up to 23% can be expected in some London out-codes.
The online valuation system many agents are using as plugins on their websites are hopelessly wrong, either above trend in London or below trend outside London and the South east, , the public is being misled by agents promoting systems they know are wrong but which help them get a foot in the door to give advice on value. The problem with that is the collateral damage cause by the impression of the market they create with the public who don’t get a qualified valuation.
This week I have tested the system I used to consider the gold standard of property data, it has been built into a valuation that is 40-50% inaccurate. At some point the lenders are going to catch a serious cold by their reliance on AVMs as will those in negative equity. That time is very rapidly approaching.
Not sure I completely agree Robert.
Whilst I do know that some agents do rely on this method to value a home, one online agent in particular, a vast majority don’t.
i would put more of the blame on agents that knowingly over value a home and agree with a vendors ‘wanted’ price, whilst also agreeing that the market is as buoyant as ever, purely because they’re scared to be honest in case they lose the business.
i have recently come up against it a lot more. As recent as yesterday for example.
I use the online valuation tool on my website, and I have to say, not once have I had a vendor that has used it been stuck on an over valuation once I have taken the time to provide an accurate valuation and show how I arrived at that figure.
Does any estate agent worth their salt really JUST use an AVM.
I’ve worked in my area a number of years, so I already have a good idea.
I print out my own local comparables.
I have a quick look on Google Maps and perhaps Google Earth Pro to measure the size of the house and/ or garden.
I download the EPC if it already has one so I can check the size.
I have a look at the Local Authority Interactive Map to check the plot size & orientation.
I use RM+ and the Best Price Guide to research the exact postcode back to 2000 to check if the property has been on the market recently.
I then generate a RM+ Best Price Guide for postcode + 1/4 mile to check the competition – I might even print it out to take with me.
I look at the Zed price.
Then I go and meet the owner and all of my careful preparation goes out of the window because Bodgit, Scarper & Sons followed by Sting & Chargemore, followed by Whoever & Co each go £10k over the last and above the price that was the right asking price to achieve the real value.
6 weeks later the price gets reduced, an offer comes in and the sale gets agreed.
Have you noticed any inconsistencies with RM listing history?
We are finding that RM+ does not show ALL properties that have been on the market since 2000, even though we can definitely recall them being marketed.
They CAN and DO obliterate them.
“Does any estate agent worth their salt really JUST use an AVM.”
Shameless cut’n’paste from good old Tw@tter:
‘Now THAT is the $64,000 question. Make that $72,000 if using an AVM. Or maybe it’s $51,000.’