Walk down any street of estate agents’ windows and you are looking at three different numbers wearing the same clothes: the price someone hopes to get, the price the market will pay, and the value of the building. They are routinely tens of per cent apart, and confusing them is the most common expensive mistake in property.

Why listings start too high

When an owner sells, they typically invite three agents to value the property — and most choose the agent who quotes the highest number. Agents know this. So there is a permanent structural incentive to value optimistically to win the instruction, sign the contract, and manage the vendor’s expectations downward over the following months. It is not dishonesty; it is how the instruction market is built. But the consequence is that a meaningful share of listings begin above what anyone will pay. When one of those is reduced, that is not the market falling. It is the original number being wrong.

In a rising market this behaviour is invisible, because inflation rescues the error within weeks. In a flat market nothing bails it out, and identical behaviour produces visible, repeated reductions. A great deal of what looks like a collapsing market is really a pricing habit becoming legible.

The standoff underneath

There is a real gap under the theatre. Sellers anchor on the peak — what a neighbour achieved in 2014 or 2021, or what they need for their next move. Buyers price on today’s interest rates, and the arithmetic is unforgiving: the monthly payment that supported roughly a £470,000 purchase at 2 per cent supports roughly £325,000 at 5.5. Same buyer, same salary, about 30 per cent less house.

When sellers cannot accept that and do not have to sell, they withdraw — the exit that property has and equities do not. So completions skew toward motivated sellers, and volumes fall long before prices do. Lots of stock, lots of reductions, lots of fall-throughs, few completions: that is not a crash. It is a standoff, and it has been the signature condition of much of the London market for years.

How to read it like a professional

• Largely ignore asking prices. Work from sold data, and remember it lags completion by two to three months.
• Time on market beats asking price as a signal. Six months and two reductions means a vendor being educated; that is where offers get accepted.
• Check the reduction history before offering. A fresh listing at an ambitious number usually means waiting.
• A big reduction is not automatically a bargain. It often means the property started at fantasy money and is now merely optimistic.

And if you are selling

The highest valuation you are offered is usually the worst outcome you can choose. Your first three weeks on the market generate the most viewings you will ever get. Spend them at a fantasy price and you burn your best buyers, go stale, and end up accepting less than a correctly priced launch would have achieved. I have watched this film so many times I can recite it.

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Aldo Attanasio d’Aponte is the founder and chief executive of Arbitrage Group, a boutique buyer-side advisory specialising in prime central London real estate. This article is general commentary and not financial, legal or tax advice.