What is the state of the UK housing market? Is the glass half full, and if so, is it a glass of Retsina?
Publication of the latest report from HM Land Registry on Tuesday brought the final data to provide a summary of the health of the housing market for the first chunk of this year, and with it some pretty important numbers.
The number of homes sold remains extremely low with just 2,194 selling across the UK every day (Source - HMRC). The long-term average is 3,474 while 5,333 were selling each day in February 2007.
A total of 5,115 new properties came on to the market every day in May, not too far short of the 5,244 that normally do, although 8,210 were put on every day in May 2006.
The number of months of unsold inventory (used as a guide to the ratio of homes for sale and the rate at which they are selling) over the last decade has averaged 12 months with a low of 7.6 months in December 2006. Today we have 15.4 months of stock.
At this rate and with the current volume of new supply coming on to the market, the chance of a home selling in the first month of marketing is just 6% and if left on the market for 12 months it is only 29%. It would normally be closer to 44%.
The gap between average asking prices (Rightmove.co.uk) and average sale prices (Land Registry) is at an all-time high of £78,571. Whilst the two ‘baskets’are not exactly comparable, the trend suggests that sellers remain over-optimistic and those few that are selling are taking much less than they are asking. The long-term average is £52k.
Cash buyers (those not dependent upon mortgage finance) still remain a hugely significant proportion of the market with around 40% of the relatively few transactions taking place without the need of a loan. Over the long term, cash deals typically represent around 28% of transactions.
Selling a house remains almost as difficult as persuading a Greek he should pay more tax.
Asking prices offer little help as a guide to value and buyers requiring finance continue to struggle.
We are in for a long, hot, frustrating summer!
Links:
Henry’s graphs
https://web.me.com/henry.pryor/Housing_Expert/The_market.html
Land Registry
https://www1.landregistry.gov.uk/upload/documents/HPI_Report_May_11_cf4rvp10.pdf
Rightmove
https://www.rightmove.co.uk/news/files/2011/06/june-2011.pdf
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Comments
Price your property fairly, use the right keywords and keep your property well maintained to increase the chance to be in this 6% bracket
That is pretty good, I am thinking of selling my house for a good price and I am also looking for estate agents in Maidenhead who can just do that for me.
I've waited patiently for a response, Mr Pryor. But I think I've waited long enough now that you need a reminder.
It's not good form when you make wild, unsubstantiated claims about the prospects of an entire industry (based upon how you predict they will perform...), then fail to answer those who question the validity of those claims, is it?
Or - is it simply because you cannot validate the claim you perpetrated?
Only 6% of new instructions will sell in the first month, you said. One in fifteen.
So - to recap, ninety four of every one hundred new instructions listed nationwide will take more than four weeks to go under offer, you reckon. More than reckon - you KNOW.
I'm waiting...
Message to all potential Vendors who might read this.
Nice property in nice road, well presented, advertised correctly, priced correctly, attracting 10 viewings first week, 5 offers, sold for full asking!
I can show example after example of the above. I would imagine most agents could. If you want to sell for top money, this is not the market to be adding your 'knock down' buffer onto your price, you just look expensive.
Over priced property will stagnate on the market and get lower offers than could be achieved by generating a lot of interest at the outset.
All the stats in the UK will not change this.
Any agent who suggests putting your property on the market at what you know is a price too much is merely flattering you to gain your instruction.
Worse! if you take the top figure as advised by local agents and add 5% or more of your own idea you have just stoned the entire proposition to death. It was likely the Agent saying the highest figure to go to market was being over optimistic in the first place.
Sorry if this bursts any bubbles.
Correctly priced and well presented property is selling fast, it is what the public want.
In the stand off between pent-up demand and pent-up supply (vendors holding out for higher prices in the future), looks like we have a winner. To what extent will all that extra supply out there push prices down now the Spring Bounce is over?
"At this rate and with the current volume of new supply coming on to the market, the chance of a home selling in the first month of marketing is just 6%..."
Oh, COME ON, Henry! Based upon WHAT??