A prominent estate agency says landlords and other property owners considering selling this spring must be realistic about asking prices.
Savills – which has given an analysis of prime markets in and outside London – says average property values in prime locations outside the capital fell 1.3 per cent in the last quarter of 2022 and another 1.0 per cent in the first quarter of 2023.
This means that annual price growth actually fell into negative territory for these prime locations, for the first time since September 2019.
Savills researcher Frances McDonald says: “Prices are beginning to stabilise across the prime regional market, following almost three years of strong growth. While best in class properties are still commanding competition, and buyers are still prepared to pay more for the ‘right’ home, price sensitivity is creeping into the wider market.
“Even more so than in London, the gap between buyer and seller expectations is widening. Over the past three months sellers have become less likely to reduce their price expectations, while the vast majority (59 per cent) of agents suggested that buyer budgets have reduced by more than five per cent.
“Realistic pricing is expected to play an increasingly critical role over the next couple of months, and will be vital for sellers” she insists.
And in a survey of clients, Savills says that for the first time since the start of the pandemic, price falls and market uncertainty has overtaken lack of stock as the biggest issue for buyers.
Meanwhile price growth in London prime markets – which Savills says represents the top five to 10 per cent of properties by value – held steady in Q1 2023 with a negligible rise of just 0.1 per cent, after experiencing falls at the back end of last year.
The agency says growth across almost all London regions improved on last quarter, as markets begin to stabilise following the Mini-Budget dip. However, the gap between buyer and seller expectations on price has widened over this period with 53 per cent of agents reporting that buyers now expect to pay at least five less for their new home, compared to just 13 per cent who think sellers are prepared to lower their price expectations by this much.
