This month, Rightmove put a few wobbles of worry in the property market, announcing more than a third of UK home sellers have been forced to cut their asking prices. According to the online property portal, which claims to list 90% of the property for sale in Britain, the number of cuts to house prices are at the highest they’ve been since 2012.
Rightmove pins the blame on sellers being too optimistic about their asking prices and failing to consider the climate of a stalling market and interest rates rising.
What do other property experts think about Rightmove’s announcement about a third of home sellers being forced to reduce their asking prices?
Agent Wow spoke to Chris Schutrups, Managing Director of the Mortgage Hut, about his thoughts on the subject.
The reasons for the price cuts
According to Chris Schutrups, the current price cuts we’re seeing have a lot to do with confidence.
“We have had a buoyant property market over that last 12 months and have seen rising prices, with properties being sold well above asking price in some areas of the UK, thanks to a shortage of available property and increased demand. This has led to vendors pricing their property higher than the market will stand, as demand levels have dropped with the seasonal slowdown approaching Christmas. Basically, vendors have increased expectations which are out of kilter with the current market conditions,” Chris Schutrups told us.
House prices need to readjust
Mortgage Hut’s Managing Director says consumer confidence in the UK property market is strong and appears not to have been affected by Brexit and the election, earlier this year.
“Even though there have been recent interest rate rises, this has had little not impact on the lending, as it is a small increase for the average working couples and families. However, prices need to slow down otherwise we are in danger of another property bubble bursting. House prices need to readjust, as they have been rising well ahead of salary increases and inflation. We have significant seen readjustment in London and the rest of UK appears to be following in its path,” Chris commented.
Affordability is key
Chris Schutrups also noted how the property market is cyclical, so we therefore know that these lower prices are not here to stay.
“What we are simply seeing a readjustment in prices. In some parts of the UK, prices have been rising over 10% and this is not sustainable. Affordability is key and the property market is healthy if it has sustainable growth that is line with inflation and salaries,” Chris concluded.