House prices may be 'too low for sellers'

Recent drop-offs in house prices will influence property decisions, but will not necessarily lead to more buying, it has been claimed.

London residential property agent Ludlowthompson identified the decreases in November house prices as a sign that sellers could change tack, but claimed that for some this would mean renting homes out for longer until price outlooks improved.

Halifax's November House Price Index witnessed a 1.1 per cent monthly fall in house prices – a third successive month of reported depreciation – but many sellers were not willing to part with properties at a price low enough to attract buyers in the current climate.

Stephen Ludlow, director of Ludlowthompson, said: "I don't think prices will tumble; [but] inevitably, if you're in a situation where you have to sell quickly, then you're going to have to put a discount on your property."

"Particularly in the London market, people will still make a decision about whether they rent or whether they buy," he added, explaining that purchases would only be likely "if interest rates remain at a level where buying is still appealing in relation to renting, and [people are] confident in their jobs".

The property agent also indicated that some sellers with the necessary cash could move up the ladder with a new property purchase bought at lower current prices, while continuing to rent out their original property.

Published 12th December, 2007

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