Zoopla warns of overpricing impact on house sales

The UK’s housing market is showing signs of recovery as house prices rise slowly following a period of volatility, Zoopla reports.

However, the platform also warns that a record-high supply of homes for sale is emphasising the importance of realistic pricing strategies for sellers.

According to its latest house price index, average UK house prices have increased by 1.4% in the seven months to July.

This growth is driven by increased buyer demand and sales agreements, which have rebounded from a slowdown caused by rising mortgage rates last year.

More sellers gain confidence

Executive director Richard Donnell said: “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.

“Buyers have much greater choice which will support sales numbers, but this will keep prices rises in check.”

He adds: “Buyers have less purchasing power than two, 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.”

House price inflation varies significantly

While house prices are rising in most regions, the growth rate varies significantly with price inflation ranging from -0.9% in the East of England to +5.1% in Northern Ireland.

The supply of homes for sale has reached a seven-year high, with the average estate agent listing 33 unsold properties.

This increased competition is expected to keep house price inflation in check.

However, Zoopla warns that sellers must be realistic about their pricing expectations.

Buyers remain price-sensitive, and homes that are overpriced can take significantly longer to sell.

The site says that homes with asking prices reduced by 5% or more take over twice as long to sell compared to those without price cuts.

‘Positivity within the housing market’

The chief executive of Propertymark, Nathan Emerson, said: “There is a real positivity within the housing market now that the economy seems to have stabilised.

“This is the UK government’s chance to take advantage of current market confidence by clarifying a more precise timeframe for enacting the Planning and Infrastructure Bill as this will build the homes desperately needed in order to keep up with ever-growing demand and start to form a plan of action if the government wants to meet its target of building nearly two million new homes across the next parliamentary term.”

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Sellers can’t afford to get carried away. Buyers are back, with demand up a fifth in a year, but sellers who get cocky, and price their home too optimistically, will pay a horrible price for their over-confidence.

“Sellers who end up having to cut their asking price by 5% or more take more than twice as long to sell – which for new sellers would mean squandering the back-to-school September market.

“There’s plenty to cheer in this data, with house prices up 1.4% since the beginning of the year, buyer demand booming, and more sales being agreed.”

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