Don’t look now but there aren’t any houses for sale. Not literally, of course but the number of new properties coming onto the market since the summer is down by nearly a half. The RICS, Rightmove and others have been indicating for the past couple of weeks that something was up. RICS reported a 51% drop in larger houses it’s members were selling in August and similar pain in September. Rightmove reckon there was “a slump of 41%” in the number of larger houses being marketed. Most worrying is that in June there were almost 20% fewer houses actually sold compared to the year before. This is the last month for which the Land Registry provide figures but is before the introduction of HIPs which have been blamed by some for the current shortage of houses for sale.

What adds to the confusion and may be why no one has spotted what’s actually going on is that there is now an appreciable amount of what the trade calls “churn”. These are houses marketed earlier in the year that haven’t sold and have been put back on the market with a new agent. These appear in the email alerts that you can sign up for from the big property portals and look like they are ‘new’ to the market but in fact, about 65% aren’t, they are just look new because they have a new marketeer in charge.

In an average month there are usually over 110,000 properties that come onto the market. At the moment, it looks like there will be less than 50,000 in October. What does this mean? Well, as regular readers will know, the value of your house (even if it’s not on the market) is dictated by the prices achieved of the few homes being sold at any particular time. What seems to be happening is that people have stopped actually buying and selling houses. An illiquid market means that your home is much harder to sell and if you have to sell, you will have to price it attractively to get a buyer to think it’s worth looking at and that you are serious about selling. “Attractively” is agent-speak for cheap.

Amongst the snow-storm of reports that I and all the other property pundits will be looking out for are the following;- Rightmove’s October statement on 15th October when we will have a better idea on exactly how few properties they think are currently for sale and The Land Registry report on 26th October which will then confirm what actually happened in September and whether people really have stopped buying in significant numbers.

If it’s true, we haven’t seen anything like this for years. Something very, very strange is happening to the UK property market and uncertainty is never an asset when trying to predict the future. The Northern Rock queues formed when people were uncertain if their savings were safe. What will they do if they are uncertain whether the value of their home might be heading south?