Bottom of the market collapses

The monthly Land Registry report out today confirms that for the third month running, sales of properties at the bottom of the market are seizing up.

The latest report from the Land Registry which records the sales of properties in England and Wales shows that the number of properties sold below £250,000 in July dropped by 33% on the same month in 2006. This follows drops of 15% and 20% in May and June and illustrates just how serious the market is stalling.

Housing expert Henry Pryor said “These are really significant falls and illustrate the impact of the series of interest rate rises we have seen in the past fourteen months. We know that supply of new property has been choked off since 1st August with many commentators blaming the introduction of HIPs but it is clear that those on the bottom few rungs of the housing ladder were already stretched way before.”.

“I am concerned that with a 40% reduction in the number of mortgage products available post Northern Rock there is even less opportunity for people to buy at the bottom and as a result, those trying to sell further up the ladder are going to be faced with a significant reduction in their own aspirations when they come to set their own asking price. There were 44% more houses sold over £1million in July which shows that the pressure at the bottom had not yet filtered up to the top”.

Pryor continued. “The average estate agent has over 66 properties to sell at present which suggests that they are not selling as many as they were. Buyers appear to be holding off perhaps in the hope that houses will be cheaper in the New Year.”