Home sellers 'cut asking prices for first time in 2011'

image captionUnsold homes are still hugely over priced

People trying to sell their homes have dropped their asking prices for the first time this year, according to the property website Rightmove.

It says asking prices dropped by 1.6% this month, or £3,797 on average per property.

The sluggish market this year has meant that 70% of homes put up for sale in 2011 have still not found a buyer, Rightmove said.

At £236,597, average asking prices are still far higher than selling prices.

The average UK selling price, as calculated by the Department for Communities and Local Government (DCLG) is £203,528.

This suggests that sellers or their estate agents are over-valuing homes by 16%.

The reality gap is even greater when asking prices are compared to house prices as calculated by the Halifax or the Nationwide.

The Nationwide says the average house now costs £168,205, while the Halifax says they cost £163,049.

That puts the reality gap at 41% based on the Nationwide's figures or 45% on those from the Halifax.

"Many equity-poor aspiring sellers will be trapped in their current homes, either unable to come to market or stuck on the market and unable to reduce to a price that will attract buyer interest," explained Miles Shipside of Rightmove.

"With seven out of ten properties marketed so far this year still on the market, sellers in the second half of 2011 need to do something different to promote their property and increase their chances of catching those elusive buyers".

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