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Houses on the market sell for nearly 4% less than the asking price

20 Dec 2017 | News|House Prices

Homeowners selling their home can expect less cash than the asking price as the gap between asked and sold prices increases.

Data from property platform Zoopla shows homeowners in England and Wales receive on average 3.86% less than the asking price when they sell their house.

With an average property value in the UK of £223,807 based on ONS figure this could be a saving of £8,661 although the difference is greater for Bradford on 6.32% followed by Preston with 6.24% and Swansea with 5.87%.

First time buyers can make a lower offer price compared to the asking price in some areas and means they would need a smaller deposit or mortgage to purchase their first home.

Large differences across the country

The asking-to-selling price gap is 0.32% bigger than last year suggesting homeowners are more unrealistic about the value of their property.

From the Zoopla data the top five post towns with the largest gaps between the asking and selling price are as follows:
Post town Price discount
Bradford 6.32%
Preston 6.24%
Swansea 5.87%
Newcastle 5.19%
Bolton 4.92%
Bradford in Yorkshire sell for the biggest price discount, with 6.32% off the asking price followed by Preston in Lancashire with 6.24% and Swansea in Wales on 5.87%.

This compares to the top five post towns with the smallest gaps between the asking and selling price are as follows:
Post town Price discount
Bristol 1.90%
Sheffield 2.07%
Coventry 2.09%
Reading 2.42%
Birmingham 2.63%
Homes in Bristol are selling closest to their original asking price over the past 12 months with a difference of only 1.90% and with an average property value of £278,900 the difference to the selling price is £5,299.

This is followed by Sheffield with on 2.07% with an average property value of £137,300 based on ONS figure with a lower monetary gap of £2,842.

For home movers this would work in their favour if they move from a home in post town where the gap is small to a post town where the gap is large.

Lower house prices could deter buy-to-let landlords from selling their property if they do not realise a capital gain reducing the supply of properties on the market.

Properties in South East less affected

Homes in the South East of England currently sell closest to the asking price with a gap of 3.06%, although the average price of £322,311 means the difference is £9,862.

In London the sold price is 4.09% under the asking price and average price of £481,102 based on ONS figure results is a difference £19,677, the highest in the country.

Lawrence Hall of Zoopla, said properties in the south of the country are currently selling near the original asking price, as demand for homes in the capital and its surrounding commuter belt remains high.

These same areas have seen sale values slip furthest from the asking price over the past year, which is perhaps reflective of a slight slowdown in market activity in and around London, says Mr Hall.

This could mean it is easier for remortgage buyers to stay in your existing home if you can and avoid the cost of moving otherwise homeowners may have to accept a lower selling price.

To avoid the asking-to-selling price gap the older equity release buyer could use a lifetime mortgage to access wealth allowing them to stay in their home without the added stress and cost of moving.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to repay an interest only mortgage or reduce inheritance tax owed by your beneficiaries.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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