Page last updated at 23:00 GMT, Friday, 26 September 2008 00:00 UK

Large discounts by home sellers

For Sale signs in London
A moribund market has meant falling sales and lower prices

Home sellers are being forced to accept offers on average 9% below their asking price, said the Royal Institution of Chartered Surveyors (Rics).

The gap between asking and selling price is widening as the property market downturn worsens, Rics added.

Property prices have fallen by 11% in the past year, according to major lenders, while sales have fallen by more than half.

The available evidence suggests that prices and sales will fall further.

"With housing transactions currently at a 30-year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up," said Simon Rubinsohn, RICS chief economist.

"The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible, he added.

Big gaps

The smallest gap between asking and selling price was in Scotland where house prices are still rising.

But in the North of England, the discount between asking and selling price was the largest, at 12.5%.

Those vendors in Wales, the West Midlands and East Midlands, and the North West were accepting offers, on average, 10% below their asking price.

And the gap was smaller in London, at just 8.5%.

Rics said this was because London's economy was more diverse, with a large jobs market, giving sellers "more room for optimism" about the price they could hope to achieve when selling a house or flat.

However Mr Rubinsohn warned this could change.

"The London market could be adversely affected as employment in the financial sector drops off," he said.

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