It's true - houses just aren't moving

carolt

http://www.guardian.co.uk/money/2008/aug/02/houseprices.property

The number of homes finding buyers has shrunk to levels not seen even in the slump of the 1990s. Patrick Collinson finds estate agents waiting for their P45s

"House sales have all but shuddered to a halt across England and Wales according to an analysis of figures from the Land Registry, which suggests that the number of transactions has tumbled by as much as 80% over the past year.
In June last year, 105,000 properties sold in England and Wales, a drop of 15% from the year before. But so far this June, the registry has recorded just 17,681 sales, according to property analyst Henry Pryor of housingexpert.net.
.....

He acknowledges that not all solicitors have sent the registry details of sales - they have two months in which to log transactions - but the latest data indicates that estate agents are selling just a fraction of the number of properties they were a year ago. Many will now go bust, he predicts, with big job losses across the property sector from surveyors to conveyancing solicitors to removal firms. In the past few days one of the UK's biggest firms of conveyancers, Dickinson Dees in Newcastle, announced that it is being forced to make 70 legal workers in its conveyancing department redundant .
"Estate agents are clearly suffering along with their clients, with offices reported to be closing at a rate of more than 100 a week. With less than one in five properties selling and with an average cost of marketing at around £300 there will be many more who will be unable to continue to trade."
...
Annual house sales in England and Wales ranged between 1m-1.2m over the past five years, but in 2008 they are expected to fall to the lowest level for decades. The Council of Mortgage Lenders was predicting sales of 770,000 this year but admits that now looks optimistic.
Even upmarket areas, which until now have withstood the worst of the property downturn, are now looking extremely fragile. The SW13 postcode in south-west London, which includes posh districts such as Barnes and Sheen, has around 50 estate agent offfices. In May last year between them they sold 29 properties, but this May they managed to sell just three houses, according to Pryor's analysis of registry data."

mewbie_2

"Earley points out that house prices are still £11,000 higher than they were three years ago - and that the current parlous state of the property market suggests that interest-rate cuts may come sooner than expected"

It is different this time. This time all this VI rubbish is accessible at the click of a button and will be available for our amusement in years to come. Next month she will point out that they are higher than they were four years ago, etc.

LittleMissAspie

Of course not, they're stuck into the ground aren't they.

*returns quietly to the lemon thread*

WTF?_2

The fact that the housing market has virtually dried up in a matter of months as soon as no-questions-asked lending of eye-popping amounts of money was curtailed is proof positive that stratospheric prices were entirely a function of recklessly easy credit.

Now, we go through a staring contest until sellers have to blink.

Walletwatch

LittleMissAspie wrote: »

Of course not, they're stuck into the ground aren't they.

LOL, yes, the lemon thread sure is rubbing off on us...

EdInvestor

!!!!!!? wrote: »

Now, we go through a staring contest until sellers have to blink.

But why should they?

Nationwide says the low level of sales may be because there are few forced sales. "It may be due to the reluctance of sellers to accept lower offers," says Fionnuala Earley, Nationwide's chief economist. "While this does little for liquidity in the housing market, it does indicate that sellers are largely not in a position where they are forced to sell."

Anyone who really is desperate to move can always rent out their home, and then rent anew where they move to.So genuine forced sellers look like a very small minority compared with last time, possible confined to bankrupts/repos ( I see the figures on this have declined) and those with 100%+ mortgages from Northern Rock.

On that basis, what credibility do the property price "crash" figures have? At 20% of normal sales and falling, you could argue we are rapidly approaching a false market.

WTF?_2

EdInvestor wrote: »

But why should they?

Well, unless people were treating buying and selling houses as a hobby in the past then the usual 'change of personal circumstances' reasons for selling would apply: Desire to move up the ladder to get a bigger place (new place) or a nicer location (aspiration), retiring, moving to a different part of the country or abroad, inability to service mortgage debt, divorce, death....

Anyone who really is desperate to move can always rent out their home, and then rent anew where they move to.So genuine forced sellers look like a very small minority compared with last time, possible confined to bankrupts/repos ( I see the figures on this have declined) and those with 100%+ mortgages from Northern Rock.

On that basis, what credibility do the property price "crash" figures have? At 20% of normal sales and falling, you could argue we are rapidly approaching a false market.

Right. So anyone who would normally sell will instead rent somewhere new and rent their old place out. Sure they will :rolleyes:.

Yep - they'll all want to get into being landlords and tenants in someone else's place simultaneously :rotfl:. Bear in mind that any mortgage on the old place will likely have to be changed to a BTL deal (lower LTV required) and any income made from rent will be taxable. And there may be legal requirements regarding fire safety measures etc. depending on the nature of the rental. Plus there's the hassle of dealing with tenants.

If they're waiting for prices to get back to where they were this time last year before they consider selling, history suggests that they will likely be waiting until possibly as late as 2017.

:rolleyes:

Banderman

Ms Earley is increasingly being left with egg on her face. It wasn't that long ago she was saying house prices wouldn't fall as there was so much pent-up demand for property

PasturesNew

California's houses weren't moving ... until earlier this week.
http://www.guardian.co.uk/world/2008/jul/30/naturaldisasters.usa

WTF?_2

PasturesNew wrote: »

California's houses weren't moving ... until earlier this week.
http://www.guardian.co.uk/world/2008/jul/30/naturaldisasters.usa

Should help the oversupply problem.

ruggedtoast

EdInvestor wrote: »

But why should they?



Anyone who really is desperate to move can always rent out their home, and then rent anew where they move to.So genuine forced sellers look like a very small minority compared with last time, possible confined to bankrupts/repos ( I see the figures on this have declined) and those with 100%+ mortgages from Northern Rock.

On that basis, what credibility do the property price "crash" figures have? At 20% of normal sales and falling, you could argue we are rapidly approaching a false market.

How very odd. Yes, odd.