Instability drives sellers to overprice

House prices in England have reached record levels because the instability of the market is causing sellers to overprice, says Moneyfacts.

House prices in England were 7.7% higher between April and June this year than at the same time in 2005, figures from the Land Registry show.

Lisa Taylor, spokeswoman for Moneyfacts, says: “The World Cup and the hot weather may have had small parts to play but the inactivity in the market is probably more down to the fact that there has been a lot of hype in the media about insolvencies, bankruptcies and repossessions.

“People who are borderline may be swayed by this instability. And rumours of another rise in the base rate could be another deterrent.”

She adds: “Sellers are overpricing their houses in a reaction to the instability of the market and are then being forced to drop their asking prices to get sales.”

A study by haart estate agents shows sellers are being forced to drop their asking prices by as much as 4.8% to combat the flagging market.

The study reveals the average house price in London is 245,017, a 1% increase on last year. However, in-activity in the market has resulted in sellers accepting less than their asking prices.

Paul Smith, chief executive of haart, says: “As this hot summer continues the inactivity in the property market means that only properties that are correctly priced are being snapped up.

“In this heatwave, people would rather be out at barbeques and enjoying the weather than shopping for houses.”

He adds: “But the temporary dip in the market and the fall in prices has en-couraged first-time buyers to return. This is the time to go out and hunt for a bargain.”