Every October the same thing happens: after their summer holidays, people come home full of optimism and put their houses on the market. And when they do so, says home search agent Henry Pryor, they put them on at prices around 3% higher than they would have at the beginning of the summer, regardless of the state of the market.
And that is exactly what has happened this year. The 105,769 properties, as we now call them, listed on Rightmove.co.uk last month, were priced on average at £7,000 (3.1%) more than those listed a month ago.
This, says Pryor, is clearly “crackers”. Supply is rising fast across the market and demand is falling: on current trends a mere 9,000 of the 105,769 properties are likely to find a buyer, “leaving the other 92% wondering what to do next”.
The correct answer, of course, is to reduce the price – something 30% of sellers ended up doing over the summer. But those who don’t cut their prices might find that someone else does it for them. How? Gazundering.
The general consensus is that gazundering – which is becoming pretty common practice in today’s market – is both rude and rather unpleasant. And it is true that it isn’t polite, after weeks of planning and admin, to suddenly demand a lower price from a vendor.
But buyers aren’t stupid: they know that this is their market and they are clearly going to use their power to get the price of the house they want down to where they consider the correct level to be. That matters, because if you only have one buyer, his idea of where the correct price should be is, in fact, the correct price.
So if a vendor won’t cut his price at the start of a deal, should he really be surprised to be asked to cut it at the end? Right now “deluded sellers” are clogging up the housing market. If a spate of gazundering clears them out, is it really such a bad thing?