An arid August looks set to lie ahead for agents, with the latest data – from a variety of sources – showing prices, transaction levels and mortgage lending all heading south.
Mortgage lending fell in June, the Bank of England reported yesterday. The number of loan approvals for house purchase stood at 47,643, 4% lower than May’s figure of 49,461 and below the previous six-month average of 50,036.
The gross lending figure of £12.9bn, was lower than the £13.1bn forecast by the mortgage industry itself, whilst the number of approvals for house purchase was 6% lower than in June last year.
Also yesterday, Nationwide reported a house price fall of 0.5% this month. It is the first time since February that the lender has reported a dip.
It said buyers are in short supply and that average house prices are now £169,347.
The new data ties in with the latest Land Registry report covering June.
According to this, house prices grew just 0.1% in June to reach an average of £166,072.
It means house prices are now 8.4% higher than last June and are at about the same level as in the summer of 2006.
Sales volumes averaged 44,114 per month from January to April – a marked improvement on the average of 32,041 for the same period in 2009, but still a very long way off the highs of 2006. In that year, monthly mortgages averaged around 120,000.
Nor is it clear that transaction levels will pick up this year.
House sale boards company Agency Express reported that the number of For Sale boards converting to Sold dropped 2.9% in July compared with June, when there was also a fall. More worrying, the level of house sales by this measure was down 3.9% on July last year.
Andrew Montlake, director of independent mortgage broker Coreco, said of the latest lending figures: “Banks are still not lending in sufficient quantities, which explains the frustration felt by many would-be borrowers.
“First-time buyers have every right to feel discriminated against, as while mortgage lending has become more profitable for many lenders, it is too often targeted at those customers who are already well catered for. Lenders are continuing to walk the easy path.
“Much more needs to be done by lenders in order to revitalise the mortgage market.”
Adam Challis, head of research at Hamptons, said asking prices had fallen by as much as 5% across the south of the country.
He said: “Tighter controls over the mortgage market are likely to remain a factor that will constrain demand for some time. As a result, we anticipate a house price adjustment through the second half of the year, reversing the gains since January. We expect house prices to end the year down by 1–2%.”
Tough times ahead as property market dips on all fronts
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Comments
You don't run a business and pay the bills on being positive or negative, you work on facts. Most of these post are utter tosh.
The market isn't back to normal. Affordability still isn't back to normal. Be positive and plan accordingly, thats how you get through the tough times and yes they are tough times ahead.
Good honest facts being reported, i can not understand the comments from others who think this will make the market worse. When the media say the market is struggling, it makes it a lot easier for us to get reductions and new listings at the right price - and therefore houses sell again. it ain't rocket science!
WARNING: Houses prices can fall as well as rise.
ADVICE: If you can only sell during house price bubbles then you are in the wrong business. Adapt or die. Don't bury your head in the sand or rely on the press to gloss over the downturn. Stop whining and work harder, innovate, etc. its what everyone else has to do!
There does seem to be a north south divide in terms of activity, with the south seemingly busier than the north. Northern agents are hampered by lower house prices and therefore lower commission levels, but it has not preveneted agents in the north embracing a low fee, high listing price culture - sheer madness. The making of their own bad results I am afraid.......
Housing market to stay flat until 2013
The UK will see sluggish house price growth over the coming years according to the Centre for Economics and Business Research, as the Bank of England's Monetary Policy Committee prepares to leave interest rates on hold this week.
The think tank said that although there would be no double-dip in the housing market – with "doomsayers" incorrectly predicting sharp falls over the coming years – growth in house prices was likely to slow next year.
"While we see a double-dip in house prices as being completely avoidable, this does not mean that we will see a return to dizzying house prices anytime soon," said Benjamin Williamson, economist at CEBR. "Our forecasts show that house prices are unlikely to reach 2007 levels before 2013," he added,
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Recession is already over, says think tankCEBR forecast a 6.7pc rise in house prices this year, slowing to a 2.7pc rise next year and 5pc in 2012.
The warning came as the MPC is expected to leave interest rates at 0.5pc on Thursday, where they have been since March 2009, as part of the committee's emergency response to the crisis.
The decision to maintain an ultra loose monetary policy stance has proved more tricky in recent months however as inflation has been above 3pc since the beginning of the year, meaning the MPC has failed to meet its 2pc target.
As recently as last week Mervyn King, the Bank's Governor, signalled it would be too early to start tightening policy because it could not be guaranteed that economic recovery in the UK was sustainable.
That call comes despite three consecutive quarters of growth, with most recently a 1.1pc increase in gross domestic product in the second quarter, which surpassed expectations.
"The news that the UK economy grew by a much larger-than-expected 1.1pc quarter-on-quarter in the second quarter promises to make the August meeting of the MPC a spiky affair," said Howard Archer, chief UK economist at IHS Global Insight.
The risks to growth include the Coalition's £113bn of fiscal tightening planned over the next five years, as well as weakness in the eurozone – the UK's largest export market – exacerbated by the Greek debt crisis. Mr King said last week that the failure of banks to lend to businesses was also a major threat to the economy, and the National Institute of Economic and Social Research warned that a quarter or two of contraction this year or next was quite possible.
The MPC will have access to the Bank's latest forecasts when it makes its decision next week, ahead of its quarterly Inflation Report on August 11. Fathom Consulting, set up by a group of former Bank economists, said the new forecasts would give the MPC a chance "to get off the fence" and make clear its views on the impact of fiscal policy on the economy.
"The Bank of England's recent forecasting record has been lamentable, not least because it has failed to explicitly account for changes in fiscal policy. We expect that to change with the publication of the August Inflation Report, which could set the stage for the re-introduction of quantitative easing," said Danny Gabay, director at Fathom.
The MPC is expected to maintain its quantitative easing programme at £200bn of asset purchases when it votes on Thursday, but has always said it has the option to extend the scheme should conditions justify it.
Reputations are formed here.
Tell your vendor today that everything with the market is rosy and take on his listing at a, shall we say, optimistic price.
A few months down the line when his house remains unsold and you are telling him he needs to drop. He knows that a few months ago, you either bullsh!77ed him, or, that you are clueless.
Either way he will then seek out a real agent.
Taking the apparently easy short term fix results in making the job harder in the long run. One of the reasons agents get such a bad rep.,is that a few divs get the rest tarred with the same bruch.
If the market is tough, then act accordingly.
I can see by the comments from Indy that he is one of the my galss is half empty brigade. During the credit crunch most people had more money and didn't spend it because of the doom brigade at the BBC and comments like yours
I am amazed that many here seem to think that talking the market up will make everything OK. Have you not learnt from the financial crises. If I were a client of yours I would go to an agent that told the truth not gloss over the facts to make a sale.
Billed over £50k this month, last month, and the month before, exchanges running at same levels, £56k July in the bank.. Luverley Jubberley...
Shame on you whingers and 'ride takers' who are not real agents, if you cant make money you are in the wrong profession, please make way for the real agents and get new jobs window cleaning or burger flipping.
Love to all the real agents out there, keep up the good work.
PS. hope all the corporates go bust in the 'new' recession. Power to the people!! Citizen Smith rules!!
Here we go again, letting the world of press releases talk us into another downward spiral. Can the media find a positive angle?
I have worked in estate agency for the last 20plus years and pundits still waffle on about "the Uk market"-there is really no such thing! every area has it's own set of individual circumstances which guide its market.A lot of our clients take out small mortgages so it affects them less than other areas.However each and every one of those years the market tails off in july and August as everyone goes on holiday.Likewise a well-presented property sensibly priced stil sells in a matter of days just as they always have! Get your vendors out there tidying up asap!
There's always lots of individual sources talking generally for the whole market and they rarely tally up alongside each other.
There are tough times ahead, we all know that.
We've had a really good year so far and I know the same can be said for many others...and we've had similar reports to this all year long!
Why take too much notice of the monthly 'number crunchers' who pontificate on a national basis without giving well thought-out reasons to justify their figures and pronouncements.
Cheer up! Know your own market.
(Whenever was August not an 'arid' month?)
Careful what you wish for you sad lot- get the message right!! I hate to think what vibes you are giving to staff- wise up property is selling, price it right get a proper fee, the good shine now, the bad, well read the posts! Career change time?? Perhaps evenb blame rightmove as normal!!!
I am torn between both arguments here, I agree that such stories are not helpful to the industry! It is okay if you take a logical approach and make what you can of the marketplace, but not for so many who read such things and spread the misrable message!
You wouldnt see a market stall vendor selling fruit with a glum face on..............If you dont believe in your industry then dont be a part of it. Yes the banks have made it far from ideal, but realistic pricing and good service can boost sales! Regardless of whats going on people need to move, dont allow stories like this to make you believe otherwise. Even if they do need to be reported as they include facts.
Thanks, but I prefer facts and reality to some jolly good spin to cheer up the market and kiss everything better.
The future is looking glum, so get your glum gear out and get on with it.
Sounds like Berkshire agent needs some anti-depressents, a holiday, or a new career. Cheer up misery guts.
I totally agree with Beakerbob. This sort of article is completly unhelpful to our industry and very one sided as I find a number published by Estate Agency Today. How about another point of view on this - sales and enquiries down in June due to world cup, tennis and heatwave. As for July most figure have not been released yet. Yes it is quieter with equiries, yes some asking prices are coming down but we are still selling. COME ON EA News how about some well rounded news before we all unsubscribe!
Beakerboo, blame the messenger if you must but this story isn't about press releases or talking the market down. It's just reporting the facts that are staring us in the face.
Agreed with the last post. The media do have a bad habit of putting 'fear' into the public. The key points in this article are 1) that house prices are at the same price as June 2006. Essentially we have experienced a 'correction' in the market. 2)that the 'dip' in the market is due to the lenders. Attack them if you must attack anyone. They are responsible for the state of the economy.
The simple facts are that prices are at least 5% down on where they were in April (which upon reflection was the peak)& likely to be 10% down from April by the end of the year. If you dont react to getting your prices down on stock that has not sold after 4 weeks then you and your client will miss the boat. Mortgage lending has tightened up big time, more stock coming on the market has diluted prices further, less buyers registering or viewing due to this sort of press leads to one big downward spiral. Its going to get far worse as the reports out today dont show the prices property is being sold for today, so wait till you see the press go crazy in September & October when the land registry figures show prices going down in greater lumps than 0.5%, more likely to be 5% drops.
Here we go again, letting the world of press releases talk us into another downward spiral. Can the media find a positive angle? I appreciate that this doesn't sell papers, but it might help the industry.