Gap between property asking and selling prices reduces

The majority of surveyors (almost 60 percent) are now reporting that the gap between asking and selling price is narrowing says latest RICS research. In contrast, last August results of the same survey revealed that the gap was widening.

Across the UK, houses are selling at an average of 11 percent below the asking price with sellers in some regions being forced to accept as much as 26 percent discount off their advertised price.

The north still seems to be the worst affected region where vendors are accepting offers, on average, at only 74 percent of asking prices. However, 63 percent of surveyors in that region did report that the gap between asking price and selling price was narrowing. Results in the North West have improved slightly, although the region is still looking weak, with vendors accepting offers at 84 percent of asking price; this stood at 82 percent last August.

Consistent with the fact that the 'new buyer enquires' and 'price expectations' balance are strongest in London, vendors are now achieving sales at around 93 percent of asking price, with 55 percent of surveyors reporting that the gap had narrowed over the previous three months.

As in August 2008, Scotland appears to be the least affected region with vendors achieving sales at 97 percent of asking price with 75 percent of surveyors reporting that the gap between asking and selling prices has narrowed in the last three months.

Commenting, Brigid O'Leary, RICS senior economist said: "The improvement in sentiment that has been captured in recent Housing Market Surveys is reflected in a narrowing in the gap between asking and selling prices. This is particularly interesting given that recent reports from Rightmove suggest that asking prices have been relatively stable since February. As new instructions continue to decline, a lack of supply is providing some support to house prices and that has helped to close the gap. Even so, some caution is still warranted. While the pace of the downturn may be easing, the housing market will still be challenged by an uncertain economic backdrop, the threat or rising unemployment and continued restrictions on mortgage finance"