The other day, a homeowner in Camberwell asked me an interesting question: what is the difference between the asking price of a property and that property’s actual value? I explained that in order for a property transaction to take place, there must be an agreement between the purchaser or buyer and the seller or vendor. Each party to a transaction may have a different perspective on the true value of that property. The buyer might think that the property is worth one figure, while the seller might think it is worth more. The mortgage company may also have their own opinions on what the property is worth. An agreeable value must be decided upon, in order for the sale to proceed.
In many of my articles about the Camberwell property market, I talk about values, i.e. what property in Camberwell eventually sells for. Asking prices, on the other hand, are not a subject I have covered for a while. Asking prices are one of four key matters a potential buyer will judge your property on – the others are location, number of bedrooms and the type of property. One thing’s for sure, price yourself too high and you will put buyers off. So let’s take a look at the Camberwell numbers.
Over the last 12 months, Camberwell asking prices, i.e. the price advertised in the paper and on Rightmove, have increased by 6%; taking the average asking price in Camberwell to £603,745 – up from £571,952 twelve months ago.
Interestingly, though, a slightly different picture emerges when we look at terraced properties and flats. A year ago, the average asking price for a terraced house in Camberwell was £961,954. Today, it’s £911,400 – that’s actually a fall of 5%, however there were far fewer terraced properties on the market a year ago (49 vs 69). Similarly, a year ago, the average asking price of a flat in the area was £430,842; today it’s £490,207 – that’s a rise of 14%.
Having carried out my own research, it seems that the that the supply of property for sale in Camberwell is beginning to increase despite the Brexit vote. In December 2015, there were 428 properties on the market in Camberwell, today there are 653 properties on the market in July – this is an increase of 53%. The upshot of this is that sellers will need to be aware of how their property stacks up against others on the market. This noteworthy increase in supply since Christmas is providing more choice for buyers and appears to be tempering asking prices.
The other point to make is this: asking prices are one thing, but what a property sells for – it’s value – is a different ball game. The average sale prices, i.e. what they sold for or the average value for property in Camberwell over the last 12 months is as follows:
- Overall Average £522,871
- Terraced £820,982
- Flats £406,454
It is clear to see that there is a difference between a property’s asking price and the price that it actually sells for. The underlying fundamentals of low-interest mortgages and tight supply remain prevalent in the Camberwell. There is one big lesson to be learned from this, however, if you want your property to sell, be realistic with your pricing.