Discounts On UK Home Prices Shrink: Survey

Source : The Business Times, June 16, 2009

Gap between asking and selling prices narrows in May

(LONDON) UK homebuyers are clinching smaller discounts on property prices as the housing market stabilises, the Royal Institution of Chartered Surveyors (RICS) said.

Resilient: The UK housing market has endured the worst of the crash in the biggest recession in decades

Around 60 per cent of surveyors questioned in May said that the gap between asking prices and selling prices narrowed, while it widened in a survey last August, London- based RICS said yesterday.

Homes are now selling at an average of 11 per cent below the asking price.

The report adds to evidence that the British housing market has endured the worst of the crash in the biggest recession for a generation. RICS said last week the market may be 'stabilising' and mortgage lenders Halifax and Nationwide Building Society said house prices jumped in May.

Improved sentiment 'is reflected in a narrowing in the gap between asking prices and selling prices', Brigid O'Leary, an economist at RICS, said in a statement. 'The housing market will still be challenged by an uncertain economic backdrop, the threat of rising unemployment and continued restrictions on mortgage finance.'

UK home sellers raised asking prices in May by the most in more than a year, according to Rightmove plc, the operator of Britain's biggest property website.

RICS based the report on the responses to questions it occasionally adds to its monthly house-price survey that was last published on June 9. -- Bloomberg