Henry Pryor Blog

Welcome to a new monthly blog by Henry Pryor, estate agent turned entrepreneur, inventor and expert media commentator on the housing market.

The Month in Numbers – July.
Seven major indices are published every month and any number of ad hoc property surveys. Of course, no one survey truly represents what is happening everywhere across the UK.

Some, like the Land Registry, only cover England & Wales. To add to its drawbacks, part of its report is based on transactions three months previously and its chosen method called 'Repeat Sales Regression' and only uses 6m of the 16m sales they have recorded since January 1995. Add to that the sales that are not included (those involving a company, for example), and you can appreciate that it's a helpful but not infallible guide. Just look at the recorded values for central London, for instance.

Rightmove records asking prices (or greed!), whilst both the Land Registry and CLG indices are being reviewed by the Government’s official statistician.
Hometrack only appears to track around 6,000 records and Halifax and Nationwide report on the mortgages they offer which between them amount to about 14,000 of the 80,000 properties sold.

Other numbers that may surprise you. There are 24m homes in the UK, of which about 13.6m have a mortgage on them. Usually, around 15% of all sales are cash deals. Currently this is running at 30%, double the norm.

London and the South-East represent 30% of all sales in England and Wales, East Anglia 11% and the North-East, like Wales, just 5%.

Each month I record the various numbers published by all the organisations, although I choose to ignore the RICS survey which, as rightly questioned on this website, is I believe a nonsense.

A survey of 'the feelings' of 250 surveyors may generate good PR but I've yet to meet an estate agent at the coalface who has any regard for something that would make Mystic Meg proud.

With the Land Registry August report published last Friday (and reported somewhat belatedly here today after the Bank Holiday Monday break), we now have all the main numbers for July.

Here are the principal conclusions when comparing the activity and prices reported with the same month all the way back to 2003. We note that:

* The total number of homes on the market has jumped 33% compared to last July and is now just below the long-term average.
* New instructions are coming on at the rate of 4,189 a day. This is a 41% increase on last year but below the number in July 2006 (7,714) and the long-term average of 5,394.
* Property is selling across the UK at the rate of 2,613 a day. This is just 3% more than last year and 1,000 below the long-term average. In my opinion, this is the major cause for concern.
* Average asking prices in July were just 4% above 2009 but are a staggering £65,443 more than the average selling price recorded by Halifax – again, as has often been reported on this site, although ignored elsewhere. This asking price figure goes some way to explaining why so many agents think that prices have held up. It's almost impossible for agents to confirm that prices are once again under pressure, but privately many agree. This autumn, one of the only weapons in the arsenal is a price reduction.
* During the downturn, expensive properties suffered just as cheaper homes did. Sales of homes over £1m dropped to 265 in July last year leaving many of the upmarket agents suffering. Volumes are now back to their average and on a par with volumes in 2006 and 2008.
* Just 81,000 homes sold across the UK in July (source: HMRC). If you add the number of homes on the market to the number that will come on in September, then just 8% of properties offered for sale this month with actually sell. I don't buy the oft-repeated cry for more instructions or react well to the blizzard of leaflets that some firms insist on sticking through my front door claiming to have a queue of hot buyers. But can there be any better message for vendors that if they are serious about selling, then they need the help of an estate agent?

To see Henry’s charts in detail, go to files.me.com/henry.pryor/zplcgm