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Are Unrealistic Sellers Holding Back The Market

December 13, 2010

Despite many people forecasting that 2010 could be the year that the property market kick-started back into action, it has been announced recently by the Royal Institute of Chartered Surveyors (RICS) that new buyer enquiries decreased for the 5th month in a row.

Although housing market activity generally slows on the run up to Christmas, it is also felt by the National Association of Estate Agents (NAEA) that ‘unrealistic’ sellers are presently holding back the UK residential property market and leaving the all important first time buyers out in the cold.

The NAEA has cautioned that sellers will have to lower their expectations and their asking prices if the stagnant housing market is to receive the kick-start it so badly needs.

This warning by the NAEA is supported through the actions of some of its members. ITV Wales ran a news item on a seller who having been advised to lower her selling price to a more reasonable level had her property withdrawn from the market by the estate agent and was slapped with a charge for £300. Declining to pay out, she took the agent to court, lost and was forced to pay the withdrawal charge plus legal costs.

It could be this is a sign of things ahead, as undoubtedly agents do not want a bunch of overpriced properties languishing on their books without any realistic possibility of selling in the forseeable future.

Jeremy Leaf of the RICS warned that change was needed to take the property market out of the doldrums.

“With both supply and demand falling, transaction activity is set to remain at relatively flat levels for the foreseeable future. Agents may be cautious about what this could mean for house prices in the short term, but dramatic falls are likely to be limited by a gradual drying up of stock coming to the market.

“It is also worth noting that a subdued housing market is not good news for an economy which requires a high degree of mobility to take advantage of job opportunities.”

So where are house prices heading as we move forward into 2011?

Back around the start of this year, some forecasters were forecasting that house prices could raise by as much as 20% by 2013. Nevertheless, the NAEA thinks prices are much more likely to stay stable throughout the next 12 months providing interest rates remain low.

But that’s only one viewpoint amongst many. No one really knows what is going to happen with house prices in 2011, and only time will tell.

13th December 2010

Written by Richard Best

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