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Estate agents are ramping up asking prices in a bid to win custom from homeowners who have an unrealistic view of how much their homes will sell for, the property website Rightmove said today.
Reporting a 0.9% increase in the average asking price of houses in England and Wales in March, Rightmove said sellers had not yet adjusted to market conditions.
"To win new instructions, agents are agreeing to vendors' demands and are marketing properties at what seem like unrealistically high prices for a short period of time," the report said.
"They then have to persuade vendors to reduce the price to the point at which buyer interest is going to be found, [which is] likely to lead to a lower eventual price."
The figures show sellers raised their average asking prices by £1,918 to £218,081 in March from £216,163 in February. However prices remain 9% lower than in March last year.
In London, the average asking price increased by 2.9%, from £388,546 in February to £399,867 this month. This is 1.8 below last year's figure.
The national average asking price for a detached house stands at £312,893; £184,300 for a semi-detached house; £168,828 for a terraced property and £184,821 for a flat.
Buyers with financing in place are snapping up properties at around 25% below peak prices, according to the index.
However, while buyer interest is up 120% on last year, the number of new sellers has dropped 57%, with 79,000 new property listings this month compared with 182,000 this time last year.
Miles Shipside, commercial director at Rightmove, said: "Some sellers are still pricing wishfully high.
"Odds of selling would be much further improved if current mortgage approval volumes were allowed to rise. Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector."
Estate agents said they had been warning sellers not to overprice their properties.
David Smith, senior partner at Dreweatt Neate estate agents, said: "What absolutely must not happen is that sellers, reading about the increased interest in the market and aware that borrowing rates are unlikely to get lower, start to believe they can price more aggressively. Like it or lump it, the buyer is still very much in the driving seat."
This is the second consecutive month that Rightmove has reported an increase in asking prices. Recent surveys showing agreed prices have shown falls in February, with Halifax reporting a 2.3% decrease.
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