Sunday, January 08, 2006

Estate agents admit to pushing up values

FT.com / Your money / Your home - Estate agents admit to pushing up values
By Roger Blitz in LondonPublished Published: January 6 2006

"Estate agents, members of a profession not especially known for frankness and honesty, have confessed to a practice long suspected by homebuyers and sellers: overvaluing people’s homes.

The National Association of Estate Agents on Friday conceded that housebuilders’ accusations of “aspirational pricing” by estate agents, which they claimed had contributed to the stalling of the market last year, were mainly valid. “I would accept that,” said Peter Bolton King of the association. “Some estate agents persistently overpriced over the past year.”

There were examples, he said, of agents overvaluing properties solely to get instructions from homeowners. But there were also big numbers of homeowners who refused to lower valuations in spite of months of inactivity.

This week Redrow said aspirational pricing by estate agents was contributing to what Neil Fitzsimmons, its chief executive, said was the worst market for new and secondhand homes for 30 years. Property transactions in the year to November were 13 per cent lower than the previous 12 months, according to official statistics.

The chief executives of Persimmon and Wimpey on Friday said aspirational pricing had made market conditions more difficult. John White of Persimmon said that adding 20 per cent to a property’s value might be achievable in a buoyant market but in tougher times it likely to leave property prices “marooned”. "

A lot of houses are hanging around unsold because of overpricing - those that want to sell just have to be realistic about what the market will bear. According to Hometrack the average price acheived by vendors is just 94.5% of the asking price.

Chris Bell

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