21 February 2005
Desperate estate agents are gambling on a market upswing and over-pricing properties, a new report has said.
Home website Rightmove.co.uk found that asking prices rose 2.3 per cent from January to February, seeing the asking price of the average UK property rise £4,321 to £193,830.
However, there was a record surge in the number of new properties coming onto the market, with 132,000 new homes becoming available. With a number of properties remaining unsold from December and January, overall this means that there are now 30 per cent more properties for sale than there were at the same time last year.
With supply increasing faster than demand, and low sales volumes, Rightmove has said that this rapid rise in asking prices is inappropriate.
"Asking prices have risen this month, as is typical of the last few years, but it's not a typical year that sellers and their estate agents have become accustomed to [where activity picks up in February]. Activity levels have been really low since summer last year," said Miles Shipside, commercial director of Rightmove.
He added: “In this environment of low transaction volumes since last summer, agents already have a large stock of unsold properties on their books, some at unrealistically high prices - prices that buyers are not willing to pay.
“[Estate agents are] caught between the desperate need to earn commission on the one hand and sellers' reluctance to accept lower prices on the other.
"Plus there's often fierce competition from other estate agents in town jostling to do the same thing. In many towns there seems to be a 'rogue' agent who tempts prospective sellers with an unrealistically high valuation. These are all acts of desperation on the part of some estate agents who are gambling on a significant market recovery to stay afloat over the next three months or so."
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