The more optimistic outlook for the residential property market appears to have run out of steam in April, the RICS has reported.
Across the country, chartered surveyors reported flat demand, decreases in newly agreed sales and prices either static or falling.
London was again the only area where prices rose, albeit at the slowest rate since the middle of 2011, while the most significant price drops were reported in the West Midlands and Wales.
Peter Bolton King, making his first official appearance as RICS housing spokesman and who will doubtless soon get to grips with the net balances and seasonal adjustments littering the RICS housing surveys, said: “With the recent surge in activity brought on by March’s Stamp Duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall.
“Renewed concerns over the economy and talk of a double-dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence.
“What’s more, the continuing lack of affordable mortgage finance is still hindering many first-time buyers who cannot afford to get a foot on the property ladder.”
In today's blog on EAT, RICS residential director David Dalby sets out a range of concerns on mortgage funding.
Footnote: We try to spare readers the net balances and seasonal adjustments, but interestingly, this time the RICS has tried to explain both. It is surely helpful to know that the RICS housing market survey is seasonally adjusted ‘using X-11’, and that net balance data ‘does not quantify actual changes in an underlying variable’.
It makes Duckworth-Lewis seem simple.
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Comments
Dear anon, thank you for the vote of support.
Still not bought yet; the missus hasn't mentioned it for a while so i'm safe for the meantime....
Happy Chappy: Methinks I missed your point... ;o)
ANYWAY - on the subject of 'points' - what do you make of mine to PoTW?
Could it be that WAGES are the problem here - NOT house prices?
it seems that EVERYTHING we buy has escalated by massive percentages, but not the incomes we have to pay for it all...
There are very few people who manage to insult their own intelligence quite as well as you have.
Evidence suggests population has no effect on house prices, look at the ratio of population to households in the US compare that to the UK.....yup the US has a higher ratio yet there has been a crash there...affordability or the supply of credit is the No1 factor in boosting demand and prices.....if there were twice as many people in the UK but but they were all were below the poverty line what effect would it have on house prices and demand to own a house.
with you not being around so much I guessed you had managed to find somewhere to buy.
Welcome back!
What can go wrong? worse case is that Labour win the next election and convince people they should throw away a car they own and can afford to run and borrow to get a new one thus supporting the livelihoods of a few trade union mates?
How about artificially keeping Britain out of a world recession with massive public borrowing and cheap credit? or if we had any left we could announce the sale of our remaining gold reserves and flog it of to our chums from public school.
Going back many years i was taught that sex was the no1 cause of babies, babies being the things that grow up to be population.
Obviously, according to you I was mis-informed, is population growth a myth too?
Peebee....I think we are in violent agreement... I have long stated that reporting of averages is pointless and do so on another thread.
Is that...wow I think you are starting to get it :0) you are correct the transactions were not to first time buyers....why because they could not afford it
It is an undeniable fact more properties in the UK are less affordable to first time buyers...why?...because house price inflation has increased faster than wage inflation.
"inflationary pressure due to sex".....now that is a new and totally hilarious term. The funneist thing you have said all day! your assumpions are wrong however there are plenty of fathers who live with there parents and cannot provide for there kids....house prices will not stop that i'm afraid.
"my kids have mortgages 7.4 x their salary and have a "mortgage rent" ( the interest bit) £323 per month cheaper than the economic rent for the properties they own. "
7.4 x salary? What can possibly go wrong.
Happy Chappy: "What is the average number of legs for human beings?"
Matters not, matey. Those who have two aren't average - they are the majority.
Those that have less - for whatever reason - would YOU call them "below average"?
I certainly wouldn't...
Another consideration - EVEN IF it were a "valid" statistic - just because someone has legs doesn't mean that they have the ability to use them.
See what I mean...?
MDT Averages! :o)
Happy in a Rocking backwards and forward kind way blahing at the wind and smiling?
The fact that you were able to buy your first place and then sold it on to someone else who could afford it is an indication that every vendor only has to find 1 buyer and in the case of your original property there will be someone who can afford it next time round, It might not be a first time buyer but that only serves to prove that the inflationary pressure on property due to sex will insure that prices won't fall back.
this is just the next phase of evolution, no fella is going to get any decent trouser action while he still at home with Mum and Dad, he therefore has to work harder, save harder than the next Jo otherwise Mr Pathetic, can't provide will naturally have no offspring.
Catch 22 - I have no dilemna...so no need to feel sorry for me. Now, clearly you are the one too stupid to understand my comment and have to resort to pointless off topic posts..........you bore me!
Hi Peebee - My caps lock was just to hightlght that only one type of average gets reported.
What is the average number of legs for human beings?
PoTW: Nice to see you back. We haven't crossed swords for a while (unless you have been writing under another name, that is...) so, 'en garde' - here I come! ;o)
You say "To all those denigrating Realising Reality and others ... ". Sorry, mon ami - but Mr RR only gets what he deserves. Don't you worry yourself about him - he can denigrate with the best of them.
Now then - to your own post. You quote what income multiplier you took out for a home loan over thirty years ago. That's fine - but how about expanding on that for us. Your wage was £8k. How much was a gallon of petrol? A pint of milk? A tin of beans? Loaf of bread?
An ounce of gold?
In relation to wages, house prices are, I agree, out of kilter. But so are ALL of the above - and by FAR greater proportions, I suggest, than house price wage multiples.
What if wages, pensions, etc were double what they are now? Would you still have the same opinion?
So - what's wrong? How much things COST? Or how much money people have at their disposal to BUY them?
I can see your dilema Happy and feel for you, How does someone so obviously stupid earn enough to by a place of their own or attract a partner prepared to share a home with someone who makes no sense at all?
I can't help you, sorry
Happy Chappy: You go off on one - all caps lock and everything - about MEAN and MODAL averages. You forget the most important -
MDT averages! Cos at the end of the day, it's all MDT, innit?
House prices in more affluent areas attract higher prices from people with more income - simple as. Those that want to live there, pay the price.
The quicker the world stops revolving around averages - ESPECIALLY just the averages that suit their particular slant on a topic - the better.
Consider this hypothetical situation. A twenty-six year old female dies in childbirth along with her newborn. Their average age at death, is thirteen. Therefore, someone will quote child mortality rates as on the increase on the basis of the stated "facts".
MDT. Do you agree?
THERE IS NO "AVERAGE"!
Here we go again! The MEAN average salary is irrelevant as most people do not earn the mean average salary. a Majority of the population earn far less than that. The MODAL average i.e the one most people earn is 50% less than the mean.
The simple fact is house price inflation has far outpaced wage inflation therefore homes are less affordable o first time buyers. Look at my example I gave if i was first time buyer now I could not afford the the first property i ever purchased.
Also please tell me when a first time buyer is single person where do the 2 wages come in!
"The average property is still only 3.13 times two average salaries so for the average FTB there should not be a problem buying or saving up a deposit."
As long as they don't plan on having kids, both keep their jobs and interest rates stay at 300 year lows, they'll be fine.
two choices if one doesn't want to forever live with Mum and Dad.
Pay the economic, supply demand dictated rent or get whatever mortgage one can to buy what is available.
my kids have mortgages 7.4 x their salary and have a "mortgage rent" ( the interest bit) £323 per month cheaper than the economic rent for the properties they own.
the point of my reply was not aimed at you Puzzled but all those far smarter than me HPCers who are trying to Kanute control the property market and are simply in denial about how to go about buying a property.
Gordon Brown's economic policy from 12 years ago is what is dictating the market right now, we are suffering the fall out that was an economic certainty given the policies of that whole New Labour term of office.
The average property is still only 3.13 times two average salaries so for the average FTB there should not be a problem buying or saving up a deposit.
If one can't afford to buy where you work, commute. If one can't afford to save for a deposit, work out what the priorities are.
Puzzled Of Tunbridge Wells you make a excellent point....My first home was purchased in 1995 for £43K I put down £2150 I was earning £18K. The same property sold in January 2011 for £249K, I guess out of reach for most first time buyers in that area now!
Are you sure you are only puzzled wrote: 'The economic factors you have presented don't just affect those wanting to buy.
The demand for rental properties for exactly te reasons you have outlined means that young families are stuck in starter homes unable to move to larger homes because the tenants in the larger places are staying put.'
Any chance of an answer to the question I posed? How big a mortgage should a young couple starting out in life be prepared to take on and what will it buy them in your area?
And wrote this too:
'It is strange that 2 years down the road you are asking for advice that has already been freely given..... but ignored or worse still scoffed at.'
Oh boy. I am not asking for advice. Bit late for that in my case. When I was young I took on a mortgage of 2.2 times my salary which enabled me to buy a 2 bed flat on the outskirts of West London for £22k. I put down 4k as a deposit and took on a mortgage of 18k when earning 8k - which was a pretty average wage at the time - late 1970s.
Even today, you'd need a mortgage of about 8 times average salary to buy that flat. Is it a good idea to take on a mortgage of 8 times salary at historically low interest rates to get your foot on the precious ladder?
The economic factors you have presented don't just affect those wanting to buy.
The demand for rental properties for exactly te reasons you have outlined means that young families are stuck in starter homes unable to move to larger homes because the tenants in the larger places are staying put.
All the yadda yadda about prices falling as a reason not to buy meant that despite advice to buy what they can while they can many FTB's have waited themselves into an impossible situation.
It is strange that 2 years down the road you are asking for advice that has already been freely given..... but ignored or worse still scoffed at.
To all those denigrating Realising Reality and others ...
What do you think is a sensible mortgage to take on at the moment for a first time buyer? In terms of salary multiple - average young couple, want to end up in a 3 bed semi with 2 kids in a few years.
And, of course, let's bear in mind that:
Mortgages last at least 25 years.
Wage inflation in the globalized economy is very low.
Job security is much lower than in the past.
Interest rates are currently very low.
Come on, let's have some numbers. What should they borrow - sensibly - and what will it buy them in your area - and how will they manage the steps up the ladder and the drop in income when children come along.
Bob is actually Peter Hendry AKA Realising Reality AKA......
@bob
think its no.2...they have property interests themselves
last crash saw transactions around 1.4 million I believe
I also think many estate agents are 6 months from insolvency...personally not necessarily their businesses
prices drop 20% and you have £1 mill plus of property loans and its game over
they'll take your family home too
beware
@Realising Reality
Just as the Greeks and Spanish are being made t realise that years of boom have left them bankrupt and owing hundreds of billions, many British home owners are going to have to wake up to the reality that houses are worth an awful lot less than they paid for them.
Many in the estate agency game need to realise this also. I don't understand why estate agents want to prop up prices - a big drop in house prices would mean more transactions and more commissions.
The only reason that people in my business would not want to see much lower house prices is:
1. Because they are lazy and would rather make commission from selling one over-priced house a week than 5 or 6 much cheaper houses?
2. They are up to their eyeballs in debt themselves - either with their own house or with buy to lets... or perhaps with both?
Believe me all you newbie agents - the last housing crash in the early 90s was actually a very profitable time to be an estate agent. But if you think that the last 10 years of bubble lending and bubble prices are returning then you need to wake up to reality. It ain't going to happen and if you have over-leveraged to buy property then, well, you should not have been suckered in should you!?
'Many posting here seem to have the weird idea that if more and more mortgage finance was made available, all difficulties for those wishing to buy houses would then evaporate'.
'They would all simply be left with mountainous debts'.
In order to be in debt they would have to buy a home. In order to buy a home they would have got a mortgage. In order to get a mortgage 'finance would need to be available'. You defeat you're own argument in your opening line.
Debt is past tense, it happens after and therefore has nothing to do with 'all difficulties for those wishing to buy houses'.
Current lending criteria is so restrictive so how do you support 'mountainous debts, that none of them (or hardly any of them) could repay'.
You seem confused, jumping backwards then forwards or is this just a wind up?
RR - you live in a world of your own, I have not seen one post in support anything you say, HPC nutters backs each other, little Jonnie and Wardy back each other silly pionts, someone must believe you!!! I bet even your mum hates you!
Fun Boy Agent etc.,
Many posting here seem to have the weird idea that if more and more mortgage finance was made available, all difficulties for those wishing to buy houses would then evaporate. I don't buy that.
They would all simply be left with mountainous debts, that none of them (or hardly any of them) could repay - especially whilst job security and earnings prospects are becoming more scarce and the level of pay of the majority of those still in employment, is being lowered.
Those selling loans (or taking commission from the granting of them) really ought to wise up here.
@ Bob on 2012-05-09 13:25:04
Regarding your first point. Correct - they were stupid!
Your second. So they were right before? No, so what makes their 'belief' now that a 20% deposit is right and also that prices will fall by 20% ?
I do understand.
@rantnrave on 2012-05-09 12:29:34
'Reasonable' is variable as are percentages and most people are sensible and have seen the light.
'Nuff for today ;>)
@Ray Evans
The lenders, i.e. the banks, are tightening lending for 2 simple reasons.
1. They almost went bankrupt lending vast sums on houses and will not do the same again - by law they are now required to maintain higher levels of funds.
2. They are demanding 20% deposits because, simply, they believe that house prices are 20% over-valued and will eventually fall by that amount. Demanding a 20% deposit means the buyer carries the risk of buying at current prices with, once house prices fall, there being no loss to the bank.
It beggars disbelief time and time again that people working in the estate agency game either cannot understand the above or just wish to live in denial about what is actually going on.
during a poster change at london bridge...I noted an old poster by tsb bank offering a fixed rate of 17.25% under the heading 'peace of mind'
holy cow!!!!!!
How long will those rates stay reasonable though Ray? SVRs are going up, are they not? Will a couple who borrow £120K at 5% today still be able to pay that back comfortably at 6%, 7% etc? I've often heard older folk talk about interest rates hitting 15% within the last 25 years, ie within the lifetime of a typical mortgage.
The actual DEMAND to buy and own has not fallen - the 'moneylenders' have turned the screw too tightly on the afordability of borrowing. I do not advocate a return to 125% loans or so-called 'liar loans' but there are many who can and want to buy if the criteria and rates are reasonable?.
Shut up RICS. You really don't have a clue.
Yes Dave, your balloon is going down, lol
its called deflation and its on its way
Good Lord RR,
How long will you perpetuate your 'tosh' ?
MONEY and banking is the cause or.. in your world, should cars, food, clothes, holidays, white goods... well.....just about everything! be cheaper, falling prices due to lack of demand in ALL sectors...
What an idiot.
Are you going to stand in the general election on this ticket?
price falls are welcome if you want our kids who are the next generation of tax payers and 'growers of the economy' to take a stake in society
through no fault of their own the greed of btl owners and government attempts to alienate them have left a generation with little hope.
as the tide turns,not only will they be buying the bankrupted portfolios of the greedy,but they will grow our economy based on sound economics not fairytale economics
Richard Corpus:
I'm saying that asking prices to need to follow current market demand and to fall as demand falls, IF the number of buyers able to complete falls, whilst the number of those still wishing to move stays high.
We are being forewarned that a crisis such as this is in the forecast.
My question is: Are those in responsible positions, willing and able to help people to cope better if and when it hits, by reacting appropriately on asking prices, to keep the market from further stagnating?
Good old RICS, "old" being the appropriate adjective in more than one sense. Your negative attitude to the housing market has passed into the annals of history and any change would be seriously destabilising for the rest of us. Don't ever suggest that the jug might be half full and not half empty.
The housing market is acting exactly as one would expect it to do in current economic circumstances. It is stable, which has to be a good thing, and most house buyers and sellers have accepted that they cannot sit on their homes any more waiting to make a quick buck. Life moves on, buyers and sellers are still around, and most of us are just about managing to make ends meet.
And Peter: "House prices continuing to fall?". Not in the West Country where they bob along like a buoy in a slightly choppy sea. Very boring and not really newsworthy.
Just how much, in percentage terms, of the residential sales market do RICS agents have?
But the whole timbre of this article seems to be cast on the basis that price falls are unwelcome and unwanted.
I quote, "it is unsurprising to see that prices across much of the country are continuing to fall".
Surely, the idea should, in fact, be for prices to follow current market demand and to fall as demand falls?
If I am correct, no wonder there is stagnation and a lack of completed sales in the housing market currently? People (and this includes agents) need to expect prices to be falling and not merely be unsurprised to see (but rather reluctant to accept) that they are continuing to fall. Agents please!