The housing market is ‘tied up in knots’, Rightmove said this morning.
Asking prices crept up by 0.8% in the last month, coming on top of February’s 3.1% rise in asking prices. The average asking price now stands at £231,790 against February’s £230,030.
The gulf between asking prices and selling prices is now close to £70,000, with Halifax’s average price standing at £162,657 and Nationwide’s at £161,183.
Although new listings on Rightmove are up 5% compared with this time a year ago, they are still 26% down on pre-crunch levels.
More tellingly, the number of terrace properties coming on to the market is 31% down on March 2007, as both first-time buyers and sellers struggle to make a move. Agents had reported that lending criteria has hit prospective buyers of terrace homes hardest, as they are the least able to save the necessary deposits. A number of sellers, particularly in flats and terrace homes, also have a very restricted ability to move.
On a positive note, Rightmove reports that the higher levels of inquiries and viewings that agents experienced in January are ‘slowly’ converting into sales. Time on the market has fallen from 98 to 89 days. Unsold stock per estate agency office has crept up from 69 to 70 – far lower than is normal at this time of the year.
Miles Shipside, director of Rightmove, said: “The falling time on the market and stable spring stock levels would normally point to a healthy housing market. However, this year’s celebrations will be severely muted by the knots the market has found itself tied up in.
“This month’s number of sellers, still handcuffed by a lack of equity, has managed to limp just ahead of the number of deposit-shackled buyers, but the market is still restrained by low transaction volumes and restricted liquidity.”
The average weekly listing figure is 27,815, well down on the March 2007 weekly average of 37,667. The restricted level of new listings, he said, indicates a lack of both forced sellers and traditional mass market sellers who are currently unable or unwilling to come to market.
Shipside said that the market was very patchy and added: “Some buyers and sellers still have the winning formula to satisfy their housing needs, though with the prerequisites for a successful move being severely limited for a fourth successive year, this protracted lack of market liquidity is building up a legacy of longer-term problems.”
Rightmove also expressed concerns that developers are now building family homes rather than first-time buyer units, because developers need to build what lenders will lend on.
In 2009, developers were building houses and flats in the ratio of 50:50. That ratio is now 70:30 in favour of houses.
In London, asking prices for properties new on the market have dropped back by 1.5% over the last month, but have nevertheless risen by 3.8% so far this year.
Rightmove reports a rush on properties at £1m-plus as buyers try to beat the Stamp Duty deadline of April 6, when the tax goes up to 5%.
Shipside – who might know about such things – commented: “No doubt some observers are slightly bemused at multi-millionaires rushing around to save a few thousand by spending at least a hundred times that amount. Perhaps that’s why they are multi-millionaires?”
Comments
"As for sellers overvaluing to incorporate price haggling is all over MSE forums."
Simon - do you HONESTLY need to frequent forums to establish that the housing market principles are based upon ASK a certain price: NEGOTIATE a deal; SELL at a figure you are happy to accept?
People - is it just me... or are the current breed of net-heads lacking in the common sense department?
RE " Simon, do you have any evidence to support the opinions in your post? Not hearsay but actual examples."
Landregistry, Halifax or Nationwide figures will do, house prices are clearly falling.
As for sellers overvaluing to incorporate price haggling is all over MSE forums.
According to the report itself, the figures are up 0.9% year-on-year, not 6.9%...?
George Daws FNAEA. Quite right, the gap between asking price & sold price averages is wrong. It's actually a BIGGER gap, as the lender figures are likely to exclude a lot of cash purchases at auction where stuff is sold at increasingly discounted rates [about 25-35% at present]. Auction sales are also not featured in the land registry figures.
.......and the "crept up by 0.8%" in this story annualises up to 6.9% for the year
Rantrave - quite right. Figure duly corrected. Many thanks.
...Housing market is "tied up in knots" says Rightmove....
It would seem that it is Rightmove and the Estate Agents themselves who are doing this by continously pontificating day after day. There is not much that can be done by them to change things so why not get on with being as positive as possible, work hard for the client and consider the glass half full. That is what true selling is about and what is being paid for..
Latest average Nationwide average is £161,183, not £164,713.
Just the facts Ma'am.
Simon, do you have any evidence to support the opinions in your post? Not hearsay but actual examples.
I'm sure asking prices and actual selling prices use to be closer years ago. I suspect actual sellers are overvaluing so they can pretend to drop the price later to what they want actually want given the false impression of a reduction.
What is clear is actual selling prices are falling and set to continue falling. Those sellers who overprice their homes are just pricing themselves out.
The gulf between asking prices and selling prices is now close to £70,000, with Halifax’s average price standing at £162,657 and Nationwide’s at £164,713.
No it is not, whoever wrote that needs to read the Henry Pryor blog posts to find out why that statement is untrue.
Are we going to be treated to this story every month by a Goldfish with a keyboard?
The only figures Halifax, Nationwide ET all can sample are those that have transacted. My house isn't included the average property price and nor are millions of other properties that have not been sold.
If Halifax can analyse the asking prices of the properties within their sample, then and only then can any comment be made about the gap between asking prices and completion prices.
If that does happen the average price of property has to exclude, Council and Housing association property along with all property that has not been on the market in years.
I often see criticism of Miles Shipside and now understand why. What a daft comment - if someone in the street stopped you and offered you £100 in £20 notes would you say "No thanks not unless I can have 20 fivers".
Why not try and make the saving as assuming they are not first timers(!) no wonder these buyers are trying to save themselves quite a few bob - that saving will pay their agent fee on the property they are selling.
Here is something more interesting. Regular posters debate interest rates endlessly with different memory recall - Saturday's Telegraph printed average interest rates according to the BSA as being
Last decade 5.3%
Nineties 8.9%
Eighties 12.5%
Seventies 10.1%
I was heavily involved in lending in the 1980's and I don't recall the average interest rate we charged being 12.5% but someone somewhere knows the average new mortgage in those decades too. Difference this time around is that borrowers have stretched themselves with x4 joint income loans very common. This is unsustainable, or very difficult, even at low rates and with both borrowers keeoping their jobs so if interest rates average anywhere near 8.9% or higher this decade expect very big house price falls. Bound to be - even fewer borrowers and of course massive supply exceeding even further reduced demand.