Mrs Arrowsmith, principal of Arrowsmith Estates, says the situation is creating stagnation in properties priced at up to £650,000.
Family homes are selling as soon as they go on to the market and gazumping is starting to become a trend again, with people prepared to raise bids to secure a property.
People are not moving, says Mrs Arrowsmith, because they are being given unrealistic expectations of prices they can expect to get for their current home.
However, the price of flats is falling.
‘We have a reached a log-jam,’ said Mrs Arrowsmith.
‘As soon as decent family homes come onto the market they are being snapped up.
In fact, in the upper price ranges we are now seeing people increase bids by up to £20,000 to secure a property they want when two or more prospective buyers are prepared to pay the asking price.’ Mrs Arrowsmith said that some estate agents had been overvaluing properties by as much as £200,000 and that that that had led to sellers being given unrealistic expectations.
‘People are going to their banks with a valuation and the banks are agreeing to lend, based on that valuation,’ she explained.
‘They then go shopping for a new home and are looking in a totally unrealistic price range.
‘When they find something they like and come to sell their own property, they don’t achieve the high price they are expecting and they end up staying put.’
