Henry Pryor Blog

There’s something interesting happening in the ratio of homes for sale and the number selling.

The overhang of unsold property is on the way back up but it needs to go some to compare with January 2005 and October 2008.

We now have the main numbers which provide us a snapshot of the health of the housing market. New homes coming on to the market, homes selling, the total number of homes for sale in October and the numbers sold in August as the Land Registry data is always three months behind.

To get the full picture, download the table from here: files.me.com/henry.pryor/qv6l3f

The supply of new homes coming on to the market is 8% higher than it was last year but the number actually selling has fallen by 11%. Asking prices are up just 1% on October last year but once ‘seasonally adjusted’, sale prices are unchanged according to the Halifax – although the Land Registry has them marked 4% higher.

The total number of homes for sale has grown all year and is now 44% higher than it was a year ago. At 975,000 the total is pretty close to the long-term average of just over a million.

Compared to the peak of the market, the number of new homes coming on to the market at 3,445 is below the average of 5,349 and way below the 10,370 in February 2005.

With just 2,355 homes selling every day across the UK, this is 56% below the peak reached in February 2007.

Asking prices are above the long-term average and just 5% below the 2008 peak of £242,500. The gap between average asking prices and average sale prices has fallen slightly from £66,894 last year to £63,874. This is above the long-term average of £52,000 but is lower than the £74,818 in June last year.

If you prefer the Land Registry as the most robust indicator of the value of the mythical average home, then we are within 10% of the peak and above the long-term average.

The sale of homes over £1m continues to motor with 731 transactions published by the Land Registry. This is a welcome increase for agents compared to the 410 sold in August 2008.

Finally, something new this month. I have looked at the number of months of inventory that exists. To be clear, this is the number of homes coming to the market added to the number already for sale divided by the number that have sold.

The average over the past seven years is 11.77. That is to say that the current rates of sales would be exhausted in a year if homes continue to come on to the market at the present rate.

Last month, the Number of Months of Inventory was 15. In January 2005 the supply peaked at 19.6 months.

To see the graph of the Months of Inventory click here: files.me.com/henry.pryor/p51xbu