Over-pricing your home could mean it takes more than twice as long to sell

Everyone wants to be able to control what happens in their own homes without anyone else telling them what they should do there. After all, as the old saying goes, an Englishman’s home is his castle.

But what looks like a castle or indeed a palace in your eyes might not be perceived as such as in the eyes of others.

And with house prices rising just 1.4% since the start of 2024 Zoopla is warning that over-pricing your home could mean it takes more than twice as long to sell.

Market activity is certainly increasing with buyer demand (+20%) and sales agreed (+23%) both up on last year when a spike in mortgage rates slowed market activity.

However, with the housing market steadily recovering from those higher rates as swap rates fall and rates start to ease record levels of supply mean sellers could be left dangling if they don’t price correctly.

The property portal says supply is now at a seven year high with prices having increased 1.4% so far this year and are on track to be 2.5% higher over 2024.

Over the last 10 years house price falls have only fallen in three quarters- Q4 2022 and again in Q3 and Q4 2023, both times in response to a spike in mortgage rates.

But 2024 has seen a return to low rates of price growth with rising demand and more sales agreed.

The improvement in house prices over the year to date is being felt across most areas of the country with the average estate agent now listing 33 homes for sale on Zoopla, the highest level since 2017 and a seven year high.

Many of these sellers are also buyers which is why sales agreed are up 23% year-on-year.

But while measures of market activity are higher and price inflation positive, if you are looking to sell your home it’s important remain realistic on pricing.

After suffering months of higher mortgage rates and the subsequent loss in purchasing power buyers are still extremely price sensitive.

This is slowly being offset by faster incomes growth but there is further to go to fully repair affordability. 

The statistics speak for themselves with one in five homes having the asking price reduced by 5% or more in August to attract greater buyer interest.

But more often than not homes that need an asking price cut take more than twice as long to sell as homes without a price reduction.

It takes around a month (28 days) to agree a sale where there has been no asking price reduction but sales take more than two months (73 days) where the asking price has been cut 5%+ to attract demand. And some homes with 5%+ asking price cuts don’t sell at all.

With more and more sellers coming to the market and more expected as we enter autumn getting the asking price right at the outset will be essential if you want to secure a timely sale.

“Momentum in the sales market continues to build as mortgage rates drift lower and more and more sellers gain the confidence to list their home for sale,” explains Richard Donnell, Executive Director at Zoopla. “Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.”

And he warns: “Buyers have less purchasing power than two to three years ago and remain price sensitive meaning sellers can’t afford to get ahead of themselves on where to set the right price for their home. If you need to cut the asking price by 5% or more then your home will take twice as long to sell or may not sell at all.”