Sellers still being too optimistic when setting their asking price

Sellers are continuing to demand high asking prices that buyers are not prepared to pay, latest figures from Rightmove reveal.

Rightmove’s house price index for February shows prices have gone up by 1.2%, compared with a 1.9% decline in house prices recorded for January. The average asking price is now £216,163, which is £2,593 higher than last month.

A lack of property coming onto the books is also pushing up prices as estate agents fight for instructions. They competed for 75,140 new sellers in February, a figure that has almost halved from the 137,442 sellers recorded for February 2008.

Miles Shipside, commercial director at Rightmove, says that in January 2008 the price sellers were asking would on average go up by 3.2% month-on-month.

But although sellers are now more realistic when pricing their properties, he says that in many cases they are still too optimistic and not aggressively pricing down their properties to attract buyers.

He says: “While sellers have been more conservative in their new year bullishness than last year, they may regret not pricing more aggressively to capitalise on the spring surge in buyer interest.

“Sales are being achieved at around 25% below peak prices, yet new sellers coming to market are starting out asking an average of only 10% less.”

He adds: “Serious sellers need to set their initial asking price more realistically to get one up on the competition and take advantage of bargain-hunters who have set their own price floor ahead of the return of mainstream purchasers.”

Peter Bolton King, chief execu-tive of the National Association of Estate Agents, says: “It is too early to say whether this increase in property prices will continue.

“The NAEA believes it shows that in certain areas the downturn is slowing and hopefully beginning to bottom out, as opposed to heralding the end of the housing slump.”