Buyers push for 20% cut on asking price as predictions warn of market drop

by louise mackenzie
louise@theenquirer.co.uk

POTENTIAL buyers now expect massive cuts in asking prices due to predictions of a fall in property prices in the next two years.
According to the Bank of England, buyers are asking for as much as 20% to be knocked off before they’ll consider investing.
Experts say this audacious attitude comes as a consequence of reports claiming that house prices could fall by as much as 30% by the end of the year.
A spokesman for the Bank of England said: “Uncertainty regarding valuations was discouraging buyers, some of whom were reported to require discounts of at least 10 to 20% off the asking price.
“Mostly only forced sellers would accept discounts of that magnitude.”
Robert Harris, of Keith Ashton Estate Agents, based in Billericay, said he agreed with the comments.
Mr Harris told The Enquirer: “We have noticed a trend of people coming in with low offers. It is because potential buyers have heard the negative press about a falling market at the moment.
“We have had a few low offers accepted but it depends on the circumstances and how motivated the person is to sell.
“The lowest offer we have had accepted is 13% lowered than the asking price - £500,000 in monetary terms.”
Experts at the Bank of England have also pointed to the lack of mortgage lending as a cause for the trend.
A survey from Mortgage Lenders has reported a 27% plunge in lending, and warned there could be ‘subdued levels of lending’ over the remainder of 2008.
Kristian Hill, of Hunt Roche based in Shoeburyness, added: “The lack of mortgage lending has definitely led to a wedge being formed between buyers and sellers.
“It has meant first-time buyers are unable to take advantage of low prices and people who could have bought previously are unable to - so they come in at a lower offer. However, it’s good that lenders are holding back because over-lending was a factor in the Northern Rock fiasco coupled with inflation.”