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At Open Property Group, one of our main indicators of the property market’s health is price reductions. In August, there was news that homes where the sale had fallen through were being relisted on portals, such as Rightmove, for £21,00 less than the original asking price.

Deepening the picture is fresh research released by Zoopla at the end of September, stating that 6% of homes listed for sale have had the asking price reduced by 5% or more. In fact, the portal said the current price reduction rate is at its highest level since the pandemic.

The market has shifted in line with the cost of living crisis and mortgage rates, which have doubled on many new home loans since September’s mini Budget and the interest rate rise to 2.25%. Even the financial gains for buyers as a result of new stamp duty thresholds have been wiped out, leading to a new sense of caution among purchasers.

Many sellers will now find themselves in an unfamiliar situation – a home that’s for sale and a potential lack of buyers now able to afford the asking price. As illustrated above, one strategy is to cut the asking price in hope it will attract buyers who are working with revised budgets.

Even if sellers are unwilling to reduce their asking price in line with buyers’ new expectations, purchasers may start forcing their hand, especially in light of September’s House Price Index from Nationwide. It showed the price of the UK’s average house had dropped between August and September – a very outward and well publicised sign that the value of property is potentially on the wane.

As we have written about in the past, we expect gazundering to increase in the open market over the coming months, especially if buyers feel today’s asking prices do not present the value-for-money that is reflective of the current state of affairs.

There’s also a potential pain point for sellers who have already agreed to an offer. The recent onset of falling house prices means that a sales figure agreed two of three months ago may now be invalid. Any disparity becomes evident when the mortgage lender’s surveyor – sent to ensure the property is worth what the buyer has agreed to pay - decides there’s a problem.

In a cooling market, that issue can be that the property has dropped in value since the memo of sale was issued. In this situation, the buyer will usually revise their offer to match the lower figure suggested by the surveyor. If the seller holds firm on the pricing and the purchaser isn’t willing to pay over the odds, the sale can collapse and the property has to be re-listed on the open market.

Re-listing can be a lose-lose situation for the seller, as Zoopla’s figures bear testament. They will lose a buyer who was invested in their property and will probably have to remarket at a lower price than originally advertised to accommodate changing market conditions.

Open Property Group accurately predicted that 2022 would become a tough market for sellers, and our guide ‘my home is not selling, what can I do?’ touches on the types of challenges that are beyond a buyer’s control but need to be navigated.

Listing, re-listing and reducing asking prices on the open market is a stressful, time consuming and loss-leading waiting game that we know many sellers can’t afford to go through. This worrying process can be avoided altogether by selling to Open Property Group. We are professional cash buyers who work directly with you – no estate agent needed.

As well as selling without agent’s fees, we will offer you a genuine, fair price that reflects your desire to sell property fast and without hassle. What’s more, you will be given the option to exchange within seven working days – great if you just want to sell up and move on without delay. Alternatively, set your own exchange date that suits your onward plans.

Simply start by requesting your free cash offer and our professional team will get in touch to discuss your current property circumstances.

Published on 11th October 2022

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