How to tell if your home is overvalued – and what to do about it

It’s a tough time to be a seller. Britain’s property market has been described as being in “paralysis” while we wait to see whether rumoured property tax changes come to fruition.

According to the latest figures from Halifax, UK house prices fell by 0.3pc in September while annual growth eased to 1.3pc, the slowest pace of growth since April 2024.

Damien Jefferies, managing director of property firm Jefferies London, said: “We are in a buyers’ market right now, particularly at the upper end, with plenty of stock available.”

Therefore, if you have no choice but to list your home, this is not the time to try an over-inflated asking price.

If you’re not sure whether you’ve priced over the odds, buyers will soon let you know – though perhaps not in so many words.

“The clearest sign that a property is overpriced is when viewings dry up,” said Amy Reynolds, head of sales at Richmond estate agency Antony Roberts.

Here, Telegraph Money explains why your home might not be shifting – and the steps you can take to arrive at a more reasonable price.

Your home is more expensive than similar properties nearby

One big “turn-off” for potential buyers is seeing that your house or flat has a higher price tag than those around it.

Of course, it may be that your home has a USP (unique selling point) that warrants the extra cost – and it could be that you’re not making this obvious enough. But at the same time, don’t assume that a particular feature will secure you a higher price.

Verona Frankish, from online agent Yopa, said: “While USPs can help a property stand out, buyers are rarely willing to pay well above the odds for a home when there are comparable options nearby at more affordable prices.”

For most sellers, location remains the driving factor, especially when it comes to proximity to schools or transport links.

Ms Frankish added: “That said, space will always command a premium. A notably larger property or a bigger garden can justify a higher price where such stock is limited.”

You chose the estate agent with the highest asking price

Sometimes overpriced properties come from over-promising estate agents. When vying for business, some less scrupulous agents may suggest they can secure you a high price in order to win the instruction.

As a seller, it can be tempting to choose an agent based on asking price alone – but it won’t necessarily pay off. In these cases, it’s not unusual for said agent to subsequently recommend a reduction in price in order for your home to actually sell.

You’re selling in the wrong season

Another reason why your home may be stuck on the shelf is because you bought it in the summer – attracted, perhaps, by the balcony with a view or the sun-drenched garden – but are now trying to sell in the winter, when those features aren’t nearly so appealing.

Houses with a south-facing garden, an outdoor entertainment area and a hot tub can command a price of up to £22,000 more during the summer, based on the £324,000 average price of a three-bed home in the UK, according to analysis by property website Zoopla.

You’re charging for improvements that buyers don’t want to pay for

While almost all home improvements are expensive, they don’t all add value to a property – so factoring in how much you’ve spent on a house won’t necessarily be reflected when you’re trying to arrive at a fair value.

Ms Frankish said: “Luxury additions, such as swimming pools or high-end renovations, don’t tend to deliver the same return as ‘space’.”

This is a view shared by Mr Harris.

He said: “A new kitchen or extension can justify a higher price but a costly cinema room or tech upgrade rarely will. Think of improvements as ‘a pound in for a pound out’. They boost saleability, not always profit.”

If your home has become the best on the street, with things such as a sizeable extension and modernisation, a modest premium is fair.

“But don’t expect buyers to fund your passions,” warned Mr Harris.

You’re out-pricing your target market

It’s a good idea to think about the kind of buyer your property is likely to appeal to and price accordingly.

This might have changed since you bought it – perhaps a younger cohort of first-time buyers will be attracted to the area if transport links have improved, for example. In this case, they could be put off because your home is priced above the Lifetime Isa limit (currently £450,000).

Others, perhaps downsizers, might think twice if it breaches a higher level of stamp duty.

You’ve assumed the price has increased

This is a common mistake that sellers make – especially if, for example, they bought at the top of the market or during a trend, such as the Covid “race for space”.

Mr Harris said: “We are in a flat market, so time passing no longer equates to capital appreciation in the way it once did. Most agree that we are well past the heydays of rapid house price inflation simply due to demand.”

Today, several other factors keep prices in check, including tightening affordability pressures – such as rising household bills and higher mortgage rates affecting how much people can borrow – to policy changes, such as second home council tax.

At the same time, you may also find that right now, as people’s priorities have changed, the value of your home won’t have gone up as much as you think – or, in fact, gone up at all.

“Different areas of the market are more challenging than others. The super-prime market, for example, is very tough at present,” said Mr Pritchard-Gordon.