Homeowners looking to sell on the crest of a buoyant property market, with prices at a record high at the end of 2006, are warned that it may have already peaked and prices will drop when new properties flood the market in 2007.

The latest figures from PrimeMove.com show there was a 20% increase in new instructions during November compared to October. Henry Pryor, founder of PrimeMove.com believes this is the result of home owners seizing the chance time to benefit from high prices and sell while the market is buoyant. 

Henry Pryor warns that sellers should remain cautious. “Many homeowners are concerned about how long the property boom can continue and are selling their homes now to ensure they maximise their investment, even if this means they go into rented accommodation before buying later on,” he said.

The firm’s data also shows that in spite of the increase in instructions, the overall supply of property is at an historic low with 20% less properties on the market in November than October, driving prices artificially high. With more properties now entering the market and the problems of supply easing this could then see a plethora of highly priced homes sitting on the market in the first quarter of 2007.

Henry Pryor commented: “Although this injection of supply will mean a greater choice for buyers, the knock on effect could mean prices will fall if demand remains the same, signalling the end of the sellers’ market. Homeowners who need to sell, because of divorce or relocation, will need to price competitively to ensure a sale. As a result prices will be lower; potentially starting the slide and signalling the end of the boom.”

“Vendors who are serious about selling next year should listen to their estate agent and price their property realistically. With more choice, buyers will feel more confident of holding out for the right property and will only buy if a house looks to be priced fairly.”

“It is always hard to call the top or the bottom of a market, but I suspect that we may look back at the last quarter of 2006 and recognise that this was the peak of the market.”