Gap between asking and selling prices is widening
RICS research, August 2008

Across the UK, houses are selling at an average of nine percent below the asking price with sellers in some regions being forced to accept as much as 12.5 percent discount off their advertised price, says RICS research published today.

As economic fundamentals continue to worsen, the gap between selling and asking prices is widening. In the North vendors are accepting the lowest offers – averaging 12.5 percent below the marketed price.

Vendors in the North West, East Midlands, West Midlands and Wales are accepting offers averaging approximately 10 percent below but in London the figure stands at 8.5 percent.

London has remained firmer than most as its diverse economy and large job market offers sellers more room for optimism.

Interestingly, Scotland has yet to be affected (where the gap is only 2.4 percent) but price falls in this region have lagged significantly behind the rest of the UK and it is likely that the gap will widen in the coming months.

In the North West, the majority of vendors accepted lower asking prices with 82 percent of Chartered Surveyors reporting that the gap had widened while in the West Midlands 75 percent reported a widening gap.

More surprisingly the gap did not appear to widen in London in August with 67 percent of Chartered Surveyors reporting no change.

Commenting, Simon Rubinsohn, RICS chief economist said:

“With housing transactions currently at a 30 year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up.

"In recent surveys, Chartered Surveyors have reported that some buy-to-let investors are re-entering the market to take advantage of rising yields.

"In addition, ‘predatory buyers’ have been hovering over the corpse of a stalling market with many others cut out by the lack of mortgage liquidity.

“The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible.

"The London market could be adversely affected as employment in the financial sector drops off.”

ENDS

About RICS
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 86,000 chartered members (FRICS and MRICS) and 55,000 members in other categories of membership (TechRICS, trainees and students) globally.

It represents, regulates and promotes the work of these property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury). Visit www.rics.org/press

Notes for editors:
The Survey of August’s housing market asked two questions:
Has the percentage between asking price and selling price deteriorated in the month of August and by how much?

 For further information, please contact:

Stephen Thornton
Senior Press Officer
RICS Corporate Communications
T:  +44 020 7695 1682
M:  +44 07969 177150