Half of househunters think prices are unreasonable

Despite declines in house prices in recent years, the average cost of a home is still well above what many potential buyers could consider to be sensible, new research shows.

Rightmove found that 49 per cent of those hoping to purchase a property in the next year think prices are unfair and unreasonable.

Perhaps unsurprisingly, only around a third of those planning to sell their homes in the coming 12 months agree with this statement.

This means there is something of a stand-off developing between buyers and sellers, with the former looking for reductions and the latter intent on selling at a higher price.

Stagnation in the market could ensue unless both parties are able to bridge the price gap.

Of course, this could have a positive impact on the lettings market, particularly in London where prices are already out of reach for many potential buyers.

Indeed, the survey shows that in the capital, some 65 per cent of would-be property owners think prices are beyond a fair and reasonable level.

This could lead more people to look for property to rent in London as a more affordable alternative.

According to the latest Land Registry figures, the average cost of a home in the capital is £359,476.

This is more than three times as expensive as properties in the north-east of England, which stand at an average of just £101,689.

In the last year prices in London have risen by 6.3 per cent, while the average increase for England and Wales as a whole was just 0.9 per cent.

The Rightmove research also showed that only a quarter of house hunters across the country think prices will be lower a year from now, with the rest expecting them to be the same or higher.

Again this could lead to further strength in the lettings market as more people are forced to rent rather than buy.

Posted by Andy Britten
 

Published 6th August, 2012

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