Numbers out today (Wednesday) from HM Revenue & Customs confirm that the housing market nationally remains on the critical list. The total number of homes sold in April was 7.6% below the 79,000 sold in April last year.
Just 73,000 sales underlines just how vulnerable we are to a market collapse. “In April 2007more than 139,000 properties changed hands across the UK. Last month will have been a terrible experience for many businesses connected to the house buying and selling business. Builders, plumbers, removal companies as well as estate agents, mortgage salesmen and printers of change of address cards will all be suffering. The gated community within the M25 seems to be the only place bucking the trend.
The beep, beep, beep you can hear isn’t the sound of estate agents on their Blackberries, it’s the sound of cardiac massage being applied to the housing market. Sellers are still asking too much with average asking prices now a whopping £239,000 according to web site Rightmove.co.uk. The Halifax and the Land Registry both reckon that the average house is only worth £160,000.
London may still be the beating heart of the housing market but the rest of the body has gone into seizure and we are unlikely to see much improvement through the year.
I’m loth to quote a press release verbatim but the summary provided by ThirdCity hits the spot – and it’s Sunday lunchtime!
In-Deed.net is an online residential conveyancing service designed to make the home sale process simpler, more transparent and less stressful for the 2.6 million homebuyers and sellers each year. It arrives at a time when one in five home sales fall through as a result of poor legal practices.
The initiative of Harry Hill, founder of Rightmove and former CEO of estate agency giants Countrywide, In-Deed uses web-based and mobile technology to help consumers to track the progress of their property purchase – from instruction through to completion.
The new venture has been designed as an antidote to the poor customer service prevalent in the property legal market. Homebuyers complaining about shoddy conveyancing see current services as slow (47%), confusing (26%) and a ‘rip off’ (30%). Half have had to chase property lawyers in an attempt to speed up their transaction, wasting, on average, 10 hours of their time.
The In-Deed service features a price guarantee, a no completion-no fee promise and a team of carefully selected, highly trained, regional property lawyers who commit to updating homebuyers proactively every two days at the very least.
Harry Hill said “Buying and selling a home in the UK is always stressful. Feudal methods of property transfer still apply unfortunately, and in the last five years increased price competition to secure a shrinking market has driven service standards in conveyancing that are unacceptable in many cases. The consumer is left in the dark about one of the most important transactions in their life. It’s time for a new script.
“We can’t change the UK legal system. What we can do is continue to work with some of the best people in the industry to bring conveyancing up to date. Our use of modern technologies simplifies the process and gives consumers more control over their property transaction at a time when they need all the help they can get.”
Harry Hill’s co-founder is long-term investor Peter Gordon who has spent nearly two decades at 3i turning small businesses into valuable ones. The duo has assembled a team of property, legal, IT and marketing specialists to spearhead the business and Philip Williamson – former Nationwide CEO and ex chairman of the Council of Mortgage Lenders – joins as a non-executive director.
The start up team have ambitions to take the highly fragmented online conveyancing market by storm and plan to become market leader within 3 years.
Hill added: “I’m not very good at being second or third. Together with a team I built Countrywide from a small estate agency group to the largest of its type in the world, and developed Rightmove which, now valued at £1.2bn, is best in class. Similarly, I believe In-Deed will dominate the conveyancing market and set service standards for others to aspire to.”
TV personality and home buying expert Phil Spencer will front the launch and a high profile marketing push, which kick off in the autumn.
The service launches 22nd May on http://www.In-Deed.net.
The latest report from HM Land Registry piles yet more statistics onto our collective knowledge of the housing market in England & Wales. In their recent report Lloyds Bank noted the sharp rise in the sales of million pound properties across the UK (54% higher last year than in 2009) and the bank claimed that sales of homes at the top of the housing ladder were rising at their fastest rate since 2006. In fact the number of expensive homes selling across the country (486 in January) is almost exactly the average number (473) each month over the past six years.
Looking at the Land Registry data several things come into sharp focus;-
• The total number of homes sold in January was 70% below the peak of 124,517 sold in August 2007.
• The number of £1m homes sold in January was ‘just’ 50% lower than the 967 sold in July that year and in London only 42% fewer.
• 66% of million pound plus homes that sell across the country are in London against a long-term average of 58%.
• At £336,828 the average price of a property in London is only 4.5% below the peak of £352,860 recorded by Land Registry in January 2008.
• Roughly the same number of homes sold in January across the country as did in January last year.
• The total value of property sold was 74% lower than the total sold in August 2007
Looking at a graph of the sales of homes over £1m across England & Wales it is clear how tough life has been even for those operating at the top of the market. 486 sales were recorded in January compared to just 184 in January 2009.
Typically around 0.7% of homes that sell each month across the country are in six figures. The latest share is nearly twice that at 1.33%. London typically forms 3.28% but made up 5.8% in January.
Assuming average selling fees of 1.4% then the total earned by estate agents last month was £82m. Imagine how much more fun it was to be selling houses in August 2007 when this total was over £318m!
These Land Registry numbers are of course lagging the real market but the trends and rolling averages provide a helpful and reliable insight. More worryingly, whilst they are not exactly like-for-like, average asking prices have continued to rise for the forth successive month according to Rightmove.co.uk while sale prices have fallen for seven consecutive months as far as Land Registry is concerned and by 3.4% over the past year according to the Halifax.
Almost to a man the market expects prices to continue to fall through the next three quarters of 2011. Of much greater concern to everyone connected to property are volumes which may have bottomed out but which are still too low to afford everyone at the table enough to subsist upon.