Gap narrows between asking and selling prices

Wednesday, 17, Jun 2009 10:43

The gap between asking and selling prices has narrowed according to research from the Royal Institution of Charted Surveyors (Rics).

Almost 60 per cent of surveyors are now reporting the gap is closing, in contrast to last August when the gap was widening.

Rics discovered houses are selling at an average of 11 per cent below the asking price, with sellers in some regions being forced to accept as much as 26 per cent discount off the advertised price.

Brigid O'Leary, Rics senior economist said: "The improvement in sentiment that has been captured in recent housing market surveys is reflected in a narrowing in the gap between asking and selling prices.

"This is particularly interesting given that recent reports from Rightmove suggest that asking prices have been relatively stable since February. As new instructions continue to decline, a lack of supply is providing some support to house prices and that has helped to close the gap.

"Even so, some caution is still warranted. While the pace of the downturn may be easing, the housing market will still be challenged by an uncertain economic backdrop, the threat or rising unemployment and continued restrictions on mortgage finance."

The north was the worst affected region, where vendors were accepting offers at an average 74 per cent of asking prices. Rics reported however, 63 per cent of surveyors in the region reported the gap between asking and selling prices was narrowing. Scotland remained the least affected region.

In London vendors are now achieving sales at around 93 per cent of asking prices, with 55 per cent of surveyors reporting the gap had narrowed over the previous three months.