UK House Prices -The next bubble waiting to burst ??

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Why more and more houses are taking over one year to sell?


Are properties that have been on the market for more than 12 months simply priced too high? Graham Norwood reports
Published: 14 December 2005


At one time it was cause to hold your head low while your name was whispered in hushed tones. But today there is no shame in admitting the truth: it seems that many houses linger on the market, unsold and in search of a buyer, for well over a year.

When I asked 30 estate agents for details of homes on sale since Christmas 2004 I expected a muted response; after all, agents and sellers unite in their reluctance to admit they cannot find purchasers. But within a day more than 200 examples hit my e-mail inbox, indicating that there are many thousands of others out there.

Part of the reason is that the 2005 property market has been slow and buyers have been more careful than ever before. Land Registry data shows that sales between January and May were 28 per cent below their long-term average. Against trend, sales improved in the second half of the year and many homes put on the market at the start of 2005 are only just attracting buyers.

"Additionally, a lot of buyers have extra knowledge to inform their decisions. There is much media coverage of house price indices and there are websites that give actual sales prices for nearby properties. Purchasers are cannier and better armed than before," says Michael Atkinson, a buying agent who specialises in finding homes in London for well-heeled clients and then negotiates a price with the seller. But sometimes the problem is not the slow buyer, but the property or its location.

For example, Chesterton Residential in Chiswick, west London, is selling what it calls "an impressive semi-detached Victorian family house... refurbished within the last two years to a good standard throughout.... ideal for entertaining". Mysteriously, despite a £995,000 price tag and lingering on sale for over a year, neither the brochure nor the agent's website includes a photograph of the outside.

The reason? "The property is close to the A4 so to take a picture of the exterior of the property would mean standing on the A4 - it's not possible," explains the marketing woman from the agency. Strange that... the road wasn't mentioned in the brochure.

An increasingly common problem is that owners of homes with large gardens sell off parts of their land to developers to build flats. It is a lucrative trick but the owners often regret it when they then try to sell the original home, which has only a small garden left, and has become overlooked by the new neighbours.

Some slow sales are down to a poorly performing estate agent. One seller, whose Hampshire property was unsold for 12 months, said her original agent suffered "a complete lack of energy and motivation." She then switched although "by the time I changed I'd missed the valuable end of a more buoyant market."

But the most likely reason for a property not selling is the obvious one - the asking price is too high because the estate agent or the buyer is simply too ambitious. "The market's been slow, but not that slow. So there are only two conclusions that one can draw about a home that's been on sale for a year or longer," says Rupert Bradstock, the country director of the buying agency Property Vision.

"Firstly it's on the market at the wrong price. Or secondly, if it's described by an agent as being on at the right price, there's something wrong with it. In my experience, it's almost always the former. And if by chance something really is wrong with the property, then the best way to sell is to lower its price anyway," Bradstock says.