Sales agreed, numbers of new property listings and new applicants all fell this month, according to the latest Hometrack survey.
It said that supply fell by 5.4% between December and January, and was the largest month fall for four years.
New applicants were down 9.5% over the month, and sales agreed dropped by 13.2%.
Hometrack said that nationally house prices dipped by just 0.5% to stand at £153,000 but forecast that falling demand would drive down prices further. It predicted that the supply of homes for sale would dwindle further over the next two quarters.
It recorded price falls across 37% of the country.
It also said that the housing market is facing fundamental, underlying issues.
Richard Donnell, Hometrack director of research, said: “Over the last six months, the Hometrack survey has recorded a 26% fall in demand. A seasonal fall is not unexpected at this time of year, but the underlying weakness is more pronounced at the start of this year.”
Donnell also said that up to two-fifths of sales are currently by cash buyers.
Hometrack’s monthly survey is based on the replies of over 5,000 estate agents.
There was further grim news as the British Bankers' Association reported that monthly mortgage approvals fell to their lowest level in nearly two years in December.
The number of mortgage approvals last month fell to 28,726 from 29,696 in November, and was the lowest since January 2009 – which, for many, was the absolute trough of the market before a surprising pick-up in the last six months of 2009.
But David Dooks, BBA statistics director, painted a picture of just how weak last year was, with 10% fewer loans approved than in 2009.
He said: “Households adopted a lower appetite for credit due to the uncertain environment for employment and the economy.”
Simon Rubinsohn, RICS chief economist, said: “A key reason for the fall in interest from prospective purchasers is still the lack of available mortgage finance for first-time buyers. That factor is, however, being compounded by increasing concern about the economic outlook. This week’s disappointing GDP figure will do nothing to ease this worry.
“Meanwhile, the minutes of the December MPC meeting demonstrate the dilemma facing the authorities as inflation approaches the 4% mark, with the split between the economics hawks and doves becoming more pronounced.
“A rate hike over the coming months would clearly be bad news for the housing market, but even without an officially sanctioned move, actual mortgage costs are already beginning to creep up reflecting developments in financial markets.
“Against this backdrop, housing transactions are likely to remain weak over the coming months.”
Comments
Our local Sequence office is blissfully touting with their 'Call me cards' to no avail, winning the odd instruction at dreadfully overvalued price with their registration fee and legal package they cant be long for this market.
FFS - interesting these are your initials
Not talking anything up old boy, just had a reasonable start
I think it is going to be another very tough year - keep over valuing and it will be tougher for you
House prices can only fall so far and we are approaching that level. Vendors will not sell if they have a mortgage that cannot be discharged and builders will not build unless they can sell at a profit.
In my view the main reason that the property market is in the doldrums is the attitude of the mortgage providers. They used to operate on a ‘considered risk’ but now operate on a ‘negative risk’ basis. The market is driven by first time buyers and many, not all, could afford the actual mortgage repayments if offered at a ‘reasonable’ interest rate with a ten percent deposit. Whilst a twenty five percent plus deposit is required the market will stall. Chicken & Egg: No first time buyers = stalled market and falling prices. Reasonable lending means first time buyers = working market with stabled prices.
Oh dear!
Unlike some I congratulate James and Confident, we've had a terrible winter but we are relatively new to the market and I think, as James points out, that it might have been the wrong time for us to expand. However I'm not bitter to see that some agents have ploughed through and kept the sales turning in a partiularly hard market. It's times like these that sort the wheat from chaff and I wouldn't wish failure on any business. We'll be trying to push on as best we can. Good luck for the spring!
To Mr O'Donnell at Hometrack: No shit, Sherlock. Do we really need these sort of stats to tell us what we know already?
As for "james' and 'confident agent', they sound like they've been to one too many NLP seminars.
Give the talking up a rest. If we can't be honest with people when things are patently terrible, why on earth should they ever believe us about anything?
I agree with "Condfident" - patchy in some offices, but better than expected overall in January
Not good enough of course, but better than expected
There are too many agents in this for this type of market. In the early nineties it was just as bad, but one could make a very decent profit due to the lack of agents back then.
More statisics.............., weve had a good month, heads down market value prices correct , great staff and marketing and you will sell.