The housing market has not functioned normally for six years, an estate agency firm has said.
CB Richard Ellis said that it is running at around two-thirds of its normal capacity.
While there are signs of minor improvements in credit conditions, the property firm says large deposit requirements continue to constrain many buyers. First-time buyers, who would make up around half of all mortgage approvals under normal conditions, are currently only making up just over a third.
Jennet Siebrits, head of residential research at CB Richard Ellis, said: “Our observations suggest that the last time the housing market was functioning ‘normally’ was in 2005.
“Since we last benchmarked the housing market against long-term averages six months ago, conditions have deviated further from these trends.
“This is illustrative of a rocky road to recovery and primarily reflects weaker house prices.
“The market is showing further signs of weakening and this is likely to continue for a year or so as the housing market and wider economy are hit by political and fiscal tightening.”
Comments
An estate agent goes into a home and gives a realistic value of the proeprty's worth.
Two other EAs also value, but at way over the 'realistic' price the 1st agent quoted.
Which EA does the home-owner choose?
Certainly NOT the lowest one.
Lesson @ RR. People are greedy. They also think their property is better than the others that have sold. They often (in my 15 yrs experience as an EA) go for the highest value quoted, and certainly not the lowest.
You try to get instructions (which you need to be an EA) when every one else is valuing way above you. I get instructions from sensible people that realise the game, and I use plenty of evidence to support my recommendations but it does not always work!
It would be great if EA's were answerable for the advice they give, that way EA's would be selected for their professionalism, ability and rapport - not on bullsh*t over-valuing.
Perhaps someone could work out how to do this? Oh, professional qualifications for EA's might help.....
"The housing market has not functioned normally for six years, an estate agency firm has said."
More like twenty six, surely...? How do they define 'normally', I wonder? 2005 was simply a price bubble taking a short breather. The last period of slow but sustained growth (that we would all love...) was 1981-83. Even that was a short-lived lull between two periods of intense growth that double-or-bettered property values.
There is NO "normal" in the market. Those looking for it will be disappointed.
Will Hicks: " It look's like it's had a cheap £10k kitchen fitted & a lick of industrial white paint everywhere."
That would no doubt be the SAME £10k kitchen and lick of paint that you made your 575% killing on up in Scotland, Mr Hicks? Oh - but at least you used local labour and not cheap EU imports - so that's all right isn't it?
Hypocrite.
Now you bang the HPC drum. You must obviously be expecting housing to become the new gold again - and are blatantly trying to rush things along to suit your own purposes.
You will be soon bidding AGAINST those you pretend to stand shoulder to shoulder with now.
Hobby investors like you should be taxed out of the market.
swep. It look's like it's had a cheap £10k kitchen fitted & a lick of industrial white paint everywhere.
This will easily push the price £90k past the peak price
it didn't sell at last time. Maybe it's the "Olympics effect" ?
There was some snow at the start of the year too, as well as that pesky Royal Wedding putting off buyers.
Estate agents undoubtably bear a lot blame for the state of the housing market . I dont blame anyone for trying to get the maximum price for a house but valuations should be realistic and relevant to the time. In a boom- prices will be high but be are no longer in a boom. I am amazed by some of the ridiculous asking prices asked by vendors and have no idea how arise at their valuations. An example :- April 2007 - nice 5 bed house close to the beach in swansea- asking price 485K. Did not sell after 2 yrs then taken off market.
Fast forward may 2011 - house now back on the market - asking price £575 . http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=6559270
what are people thinking? is ther any wonder transaction are so low?
I think RR is pretty much spot on. Surely EAs must bear some responsibility for the level of overvaluation currently plagueing the market. How else are we to explain the gulf between RM average asking prices and actual selling prices reported by Land Registry? A lot of the problem is also that Brits seem unable to face reality and accept that they have lost money on their property investments. They seem to believe that they always have a God-given right to sell for at least what they paid for it. Go across the pond guys - take a look at the numerous markets where sellers are finally puking their house 50% below where they bought them ...
I think RR makes a valid point about mortgage availability. Provided the LTV and salary multiple is sensible it seems to be a straightforward, if a little long winded process. Buyers are having to provide bank statements, P60's etc. but that's no big deal really. Lenders are just being more sensible than pre crunch when frankly my dog could have got a mortgage, it was that easy.
Considering we're all on the hook for bailing out the banks, I don't know what everyone here is moaning about.
@Realising Reality
Complete (almost) nonsense!
Before you ask, I will not improve your knnowledge by expanding further.
Here, here Wardy
RR,
Yet again your blinkered and unknowable view of how the market, estate agency and mortgages actually works precedes you.
So there’s no problem with mortgages eh?
When was the last time you submitted an application to a lender? What additional information did they ask for? was it easy to place? How many BDM's did you have to speak to before you found a suitable product?
You’re talking out of your behind yet again.
On the subject of 'sue the agent' You’re quite right.
I would like to see people being sued for running scraper websites, people marketing property without being a member of a redress scheme and I would like to see the property misdiscription act in forced on rouge websites.
.
Some say these figures reflect the general stagnation of the market, which has been due to severe rationing of mortgage funds by lenders, and fears of higher unemployment among would-be buyers.
I say NO, the general stagnation of the market is NOT due to severe rationing of mortgage funds. It's due to asking prices being unacceptably high, mostly it's the prices being suggested by agents desperately trying to win increasingly scarce instructions from sellers!
Mortgage availability is fine. You can borrow up to 3.5 times a principal wage earner's salary and up to 75% of the purchase price, over 25 years (provided you have a reasonable deposit saved up). There is therefore absolutely nothing wrong with mortgage availability, at a responsible level of borrowing.
What's the problem?
There isn't one, provided you make sure the house price is commensurate with everything else - including earnings and sensible mortgage borrowing on these.
If UNrestricted credit is allowed to developers and purchasers, once again, another calamity will materialise in the shape of over-priced houses and suddenly then - no demand. Do we really want such a negligent attitude to ruin our favourite 'market'? NO! NO! NO!
Where are the responsible ones?
Sue the estate agents, I say, for over-valuing houses at market appraisal time - seriously.
In their headlong rush to win marketing instructions, they forgot to advise their clients diligently about real values, attainable within the 'client's' timeframe for selling.
If prices were 'allowed' to moderate, first-time buyers could get started with buying a property WITHOUT needing special treatment on loans. The market could simply re-establish from there - simply-done.
So what is 'normal' then?
Can C B R explain? I doubt they will bother.