Vendors with Great Expectations

Figures released by the Royal Institution of Chartered Surveyors indicate that there has been a further rise in the number of new properties released onto the market. December statistics show that new instructions rose for the third consecutive month but RICS claim that the housing market will remain stagnant, largely due to the unrealistic expectations of vendors.

Overall, the figures are impressive and in London, the number of new properties coming on to the market has reached its highest level since 2005. The number of buyer inquiries has also increased but surveyors are resigned to another quiet year and have put the blame firmly on those ‘unrealistic prices’.

“The increasing number of prospective sellers who placed their homes on the market in December is a positive development, as a lack of stock has been a big issue in some parts of the country,” said Ian Perry, spokesman for RICS.

“But with sales expectations remaining flat, it is important that vendors are realistic in their pricing if they wish the sale to go through in good time.”

Those comments echo earlier reports that suggest some vendors have been cutting their prices significantly in the hope of driving through a sale. Back in November 2011, Property website Zoopla claimed that certain sellers were dropping their asking price to the extent where the market was seeing its biggest reductions in two years.

“With the current economic uncertainty and difficulty buyers face in finding funding, it is no wonder that sellers are having to reduce prices in order to encourage sales,” Zoopla’s Nicholas Leeming said at the time.

While it may be bad news for the market as a whole, anyone in a strong financial position who is currently looking to buy could be set for a bargain if they are prepared to wait for the price drops.

Those buyers are in the minority however as reports continue to suggest that obtaining a home loan will be an even harder task in 2012. As a result, Ian Perry is not predicting any positive changes to the housing market as a whole.

“Looking ahead, along with surveyors’ flat predictions for transaction levels, price expectations remain low,” he added.

The property news is mixed here once again although it is encouraging that there so many more new instructions on the market. However, as RICS suggest, the reductions as reported by Zoopla last year remain isolated and until that position changes, the market will continue to stagnate.