Landlords looking to sell-up and cash in on property ...

Thousands of landlords plan to sell their buy-to-let properties as a result of tax and regulatory changes, but those offloading homes are being warned of the dangers of overpricing.

Trying to sell your property has become a much trickier endeavour in more recent times, as political and economic uncertainty places downward pressure on property prices across many parts of the country.

Many buyers have built up the courage to make ever more audacious offers, given existing market conditions, with new research from Zoopla revealing that residential properties brought to market overpriced sell for £12,000 less than their listing price on average across England and Wales.

The study found that over-valued properties can remain on the market up to 58 days longer than their accurately valued counterparts.

In London, overpriced homes took an average of 60 days longer to sell than those which were keenly priced.

Evidence suggests a propensity to overprice higher value homes in southern England and the Midlands in particular.

In its analysis, Zoopla compared the difference between the listing and sales price of properties that were not discounted, but rather fairly priced, and those that were discounted because they were overpriced.

The insights highlight the importance of accurate pricing and the potential repercussions of valuing properties aggressively – either to win instructions or test the market.

Zoopla research also pinpoints the towns where homes are selling closest to asking price, which is where accurate pricing prevails.

The study suggests that properties in Salford, Driffield and Dronfield, on average, each achieved 100% of the initial asking price.

The success of sellers in these towns compares to the English and Welsh average of homes achieving 96.3% of asking price.

By analysing the price that properties were initially listed at and cross-referencing them with sold prices from the Land Registry database across 12 months, Zoopla has also established that the city of Sheffield, South Yorkshire, is next in the list of areas where homes are sold closest to asking price. Homes in the city achieved 99.6% of the price they were first listed for.

In London, homes achieved an average of 94.6% of asking price, with the London borough of Waltham Forest performing the best; homes there sold on average at 97.9% of the initial asking price.

Charlie Bryant, Managing Director of Zoopla, commented: “Our research highlights the importance of accurate pricing and reveals the areas where there is the healthiest alignment between a seller’s expectations and what a buyer is willing to pay for a property. When a home is valued too ambitiously at the start, or simply overpriced, the sales process can be derailed. Homes can languish on the market for much longer than they should and the vendor loses control of the sale, often leading to price reductions.

“Agents in Salford, Driffield and Dronfield stood out in our report in aligning their vendor expectations with the realities of the market, and what a potential buyer is willing to pay for that particular house, in that particular location. The English and Welsh average sold price, which amounts to 96.3% of the asking price, indicates a market realism, and moreover a market that is transacting good values, despite wider macro-economic and political concerns.”

TABLE 1: TOP 10 POST TOWNS ACHIEVING CLOSEST TO ASKING PRICE

Rank	Town	% of asking price to achieved (median)	% difference from asking price to transaction price	Average Asking Price*
1=	Driffield	100.0%	0.0%	£175,000
1=	Dronfield	100.0%	0.0%	£223,000
1=	Salford	100.0%	0.0%	£160,000
4	Sheffield	99.6%	0.4%	£160,000
5	Droitwich	99.5%	0.5%	£240,000
6	Hailsham	99.4%	0.6%	£263,000
7	Willenhall	99.0%	1.0%	£150,000
7	Altrincham	99.0%	1.0%	£350,000
8	Wednesbury	98.8%	1.2%	£130,000
8	Brandon	98.8%	1.2%	£186,000

TABLE 2: TOP 10 LONDON BOROUGHS ACHIEVING CLOSEST TO ASKING PRICE

Rank	London Borough	% of asking price to achieved (median)	% difference from asking price to transaction price *	Average Asking Price**
1	Waltham Forest	97.9%	2.1%	£475,000
2	Bexley	97.8%	2.2%	£375,000
3	Barking	97.1%	2.9%	£325,000
4	Havering	96.9%	3.1%	£375,000
4	Newham	96.9%	3.1%	£400,000
4	Redbridge	96.9%	3.1%	£470,000
7	Greenwich	96.6%	3.4%	£390,000
8	Sutton	96.3%	3.7%	£425,000
9	Enfield	95.9%	4.1%	£430,000
10	Croydon	95.3%	4.7%	£395,000

* Price rounded to the nearest £1,000

TABLES 1 and 2: Zoopla analysed historic listing data and matched it with Land Registry data for the period of 1/06/2018 to 31/05/2019. The annual medians have been calculated for areas where more than 100 pairs were matched.

TABLE 3: IMPACT ON SALE PRICE ACHIEVED: OVERPRICED VS. FAIRLY PRICED HOMES (ENGLAND AND WALES AVERAGE)

	Overpriced homes	Fairly price homes
Median Zoopla listing price	£235,000	£199,995
Median Land Reg Price / achieved**	£223,000	£200,000
Difference between listing and price achieved	-£12,000	+£5
Average time to sell	77 days	19 days
Average time to sell – difference between discounted and non-discounted	58 days

**The table shows that overpriced homes, on average, sell at £12,000 less than their asking price. In Southern England and the Midlands, it is the more expensive properties that are prone to being overvalued, hence the higher median initial listing price for the overpriced homes.

TABLE 3: Zoopla analysed historic listings data and matched it with Land Registry data for the period of 1/01/2018 to 31/12/2018. Zoopla then compared achieved and listing price for both discounted and non-discounted properties.

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