We all know that there are sales done for millions but we very rarely know which one and at what level. Knowing the main movers and shakers in the property market makes this a little easier but most are still paranoid about saying anything. “Where and who are doing these deals?” is what we want to know.

In north London where one would expect to see strong sales of super-prime property 2010 has not disappointed so far this year. When pressed, Mark Pollack at Aston Chase confirms four sales including;-

Elsworthy Road (Off Avenue Road and directly backing onto Primrose Hill), London, NW3

Sold by his firm to a Swiss purchaser for the sum of £16M on behalf of a UK property investor who simultaneously purchased a larger home on the same street in an arguably superior position for £20.5M from South African vendors.

Hamilton Terrace, St John’s Wood, NW8

A substantial newly modernised stucco fronted detached freehold residence (approx. 6,000 sq ft) with two adjoining leasehold mews houses (approx. 1,000 sq ft each) at the foot of the garden sold to Middle Eastern purchaser for £16.5M on behalf of UK property developer.

Avenue Road, St John’s Wood, NW8

A magnificent newly constructed detached residence comprising circa 10,000 sq ft sold to Russian purchaser for £29M.

Avenue Road, St John’s Wood, NW8

A distinctive Tudor style family home set back from the road presently comprising approximately 5,500 sq ft but with planning for new build 15,000 sq ft residence on the plot. Sold on behalf of UK property developer (who had purchased on long delayed completion some 18 months earlier) to Chinese purchasers for £10.75M.

In Mayfair Sotherby’s International and Jackson Stops and Staff have sold 14 Charles Street for just short of the £20m asking price on behalf of a mid-European client.

In Belgravia Ayrton Wylie and Knight Frank have sold 80 Chester Square to a far Eastern buyer in excess of £17.1m. and further west in Kensington Mark Redfern at Knight Frank has been involved in two spectacular sales, one for over £20m and the other for more than the £12.5m guide price. His firm has also found the buyer for a flat in Thornwood Lodge at £11.5m. 

Knight Frank have done over 20 sales over £10m in London in the first six months of the year. Noel Flint from the firm says “Whilst the weaker Pound was clearly a factor, the other driving force is the continued appeal of the ‘Cosmopolitan London Lifestyle’, offered by the capital. London remains one of the top cities in the world in which to live and the quality of accommodation on offer is second to none.”

However, the last word goes to the acknowledged ‘master’ of super-prime property Gary Hersham of Beauchamp Estates. “In 2009 there were less than 25 deals done over £10m” says Hersham. That number has been topped in the first quarter of 2010. The understanding we have with both buyers and sellers at this level is that they won’t read about their business in the press – many are extremely sensitive when it comes to the publicity so you rarely read about the deals done at this level.” 

However, in exceptional circumstance and in the right company Mr Hersham allows a glimpse of the rarified market that he and other top end agents deal in. “2010 will be remembered for a number of spectacular deals not least the record sale for a London home – a single house of 20,000sqft in Belgrave Square which we were able to broker.” 

We all know the saying ‘if you have to ask you can’t afford it’ and try as I might I can’t think of a way of finding the answer to the same question you are now asking – at least not without letting myself down. Mr Hersham smiles as I say my goodbyes and thank him for his time. As I turn to go he puts me out of my misery. “The guide price was £80m Henry”.

Mid-way through the year and all the talk is of more homes coming onto the market with just a handful of often cash buyers taking their pick of the growing selection of over-priced property. But what are the actual numbers? If we’re told the supply of new properties is up 45% does this mean the country is covered by a forest of For Sale boards? If all the buyers formed an orderly queue outside an estate agents office in Marble Arch, how far would it stretch?

We need to start by re-defining the ‘norm’. Today there are about 900,000 individual homes for sale in the UK. Over the past seven years on average about 5,400 properties came onto the market every day. Counting these listing is not an exact science since inventories include properties being re-marketed by a new agent.
Put your home on the market and it will usually be one of about a million trying to find a buyer. The sobering fact is that in the first month on the market only 10% of all the homes for sale find a match.

On the other side of the coin in an average month there are about 2 million people looking for a new home. Unique visitors to property portals, phone calls to estate agents and newspaper and magazine readership all helps to corroborate this number but I accept it is no more than an educated guess. The point is that as you will see the vast majority are just tyre kickers! Typically across the whole country only 3,600 homes sell each day.

Today it’s even worse. On current rates just 77,000 will have sold at the end of the first month’s marketing. Just 2,533 homes sold every day in June according to HMRC figures published today. That’s 18% more than did in June last year but it means the chance of finding a buyer during a month of marketing is now only 8%.

During the same month the number of properties coming onto the market increased to 4,574 per day a whopping 45% more than the same month last year!

So, there are 900,000 homes on the market today. Over the next year 1.7m more will come on (based on June’s numbers) making a total of 2.6m homes that will be marketed over the next 12 months. Of these just 925,000 or 35% will find a buyer.

The moral of this story is harsh but simple – as indeed it was in South Africa and Wimbledon too. More people lose than win. Those that win are better prepared and are not necessarily those who make the most noise.

Oh and that queue of potential buyers outside the agent office in Belgravia would stretch 1000 miles, all the way to Rome.

Number out today from the Bank of England confirm that what was once a major contributor to the economy has shut down. Home owners are no longer taking equity out of the properties and spending it elsewhere – on white goods, new cars or down the High Street.

As I explain to BBC News in Q4 of 2003 home owners took out nearly £18 billions. In the summer of 2008 as the credit crunch took hold the balance turned negative as people tried to pay down their debt.

Today, with house prices in some places falling, with interest rates low and with a Government that is frightening us with predictions of worse to come int’s no wonder that the net balance is -£3.2bn.

Property was the engine of the economy and this monthly report is often overlooked as it isn’t easy to grasp what it means but this is where the housing market and the wider economy link together. It’s no wonder that the High Street is feeling a draft – home owners are pulling in their horns, paying off their debt and hunkering down!

Surveys out from RiCS and Price Waterhouse Coopers give two distinct views on the housing market. For the here-and-now the regular RiCS bulletin aims to help with it’s quaint report on ‘sentiment’ – the number of Chartered Surveyors who feel better (or worse) than the rest of the 246 who take part in the monthly exercise.

To be blunt, RiCS own numbers tell us that their ‘view’ is based on only about 4,500 transaction out of around 80,000. There are more accurate, better informed and more useful indications on the health of the property market – most backed up by actual numbers!

Although nationally RiCS describes “the net price balance” as being +9 suggesting perhaps a modest rise in prices over the past three months in fact 64% of their surveyors thought prices had remained the same over this period. 

Due to the odd way they undertake their survey (asking their members to “Indicate by how much average house prices have changed over the last three months.” to which answers can be falling, the same or rising) the survey lacks credibility. Bizarrely, in London for example an area generally acknowledged to have seen growth in all other indices 44% of RiCS surveyors reported prices rising whilst 45% that they stayed the same. 10% felt prices actually fell! So they can’t agree what has just happened so I’m not sure we would want to hear their precious insight into what might be to come. Shall we move on?

The monthly reports from the Halifax (Lloyds Banking Group provide 1 in 4 mortgages) or the Land Registry (who see 90% of all sales) are both much more useful to buyers, sellers and to the legion of commentators who try to make sense of it all. In summary the market is thin, new supply exceeds new demand by a factor of two, prices in most places are falling slightly and cash buyers are driving much of the business that is being done. Asking prices are completely detached from sale prices and London and the South East is detached from the rest of the country. Generally sale prices are still below their peak although up on last year for most people.

So much for the snap shot of where we are.

Out of the shadows rides a report from accountants PwC who are suggesting that there is a 70% chance (don’t you just love accountants!) that house prices may not get above the 2007 highs in real terms until at least 2015 and could indeed (well, a 50% chance) take until 2020 to do so.

For what it’s worth I broadly agree although as with the Credit Crunch it is probable that estimates made now will turn out to be as much use as a chocolate fireguard. The irony of what for many will make gloomy reading is that this may actually be the best outcome!

6m people work directly for the State. Cuts of the order we are being softened up for by the Government suggest that there are likely to be significant redundancies for both the public sector workforce and for the millions of private sector employees who work as subcontractors and who had assumed that a Government Contract was gilt edged business. They are going to feel pain!

Add to this the lack of reserves available to Banks to make available as loans, mortgages will remain scarce and it is the availability of credit (of the lack of it in this case) that determines the direction of house prices longer term. I expect the direct cost of finance to increase over the period covered by the PwC paper as well as the arrangement fees etc., that already makes getting a mortgage more expensive in real terms than at any time in the past decade.

Readers may hope that the scenario pitched in the PwC report comes to pass since there are many reasons to think that prices may in fact fall. Considering the illiquid nature of property, the cost of trading, it’s unaffordability for many and the fact that prices can fall as well as rise makes it is difficult to see how yields (based on rents) of under 5% can justify the risks involved when investing in property. Rents may increase marginally but this is a another reason that I believe that prices are more likely to fall to accommodate this imbalance.

House prices may have been a one way bet thus far for anyone under 40 but the legend “your home is at risk if you cannot keep up repayments” should be tatooed onto the backside of every borrower from here on.

Statistically we are told that one in five of the working population are employed in the public sector. 25% cuts to public sector departments will not result in just one bread winner in a family loosing their job but in some cases may lead to both being out of work. It is impossible to overstate the impact that this could have on the housing market particularly in large parts of the north west of the country where nearly 700,000 people work directly for the state.

Over 6 million people are employed in the public sector – not counting those private sector jobs doing work for the state. That’s one in 5 of the working population. If 10% were to loose their jobs as part of the coalition cut backs this would be 600,000 people.

Of course not all would have to sell their home to move to find new work or indeed because they couldn’t afford to stay put but remember that in the whole of last year just 850,000 homes sold across the UK.

A recent report from Savills (mid-to top end estate agents) said that around 8% of their sales in London and the Home Counties were to public sector staff but that figure soars to 24% in northern England and 20% in Scotland. The figure in the South West is not too different at 23% all of which confirms my fears that it will be the regions who suffer most. 

Whilst house prices will remain insulated due in part to overseas buyers in London and the South East – despite this region having the largest number of public sector employees (source ONS) I expect prices to come under real pressure elsewhere. City centres like Leeds and Manchester where we have already seen the Buy-to-let sector suffer as demand for Ikea-style flats has fallen will not be the only market that struggles as the axe falls on both direct and indirect public service employees.