Sales slump as market constricts.

The latest Land Registry figures released yesterday confirm the trend through 2007 of fewer houses coming onto the market and even fewer selling

Land Registry figures confirm that 21% fewer homes sold last October (the latest month that they can report on) than in the same month in 2006. This follows similar reductions of between 20% and 30% month on month from last May for houses at the bottom of the market. We have seen asking prices fall since October by about 4.6% as vendors started to realise that the market was contracting and the latest figures released by the Bank of England today for December confirms that the reduction in the number of mortgage products and higher lending criteria means that the outlook is bleak.

Houses are now on average spending 98 days on the market, nearly twice as long as they did in June 2002. The Government had hoped Home Information Packs would help bring down the time it took for houses to sell but six months after their introduction the figures suggest that the controversial scheme has been dismissed by a market that is fixated on more important issues.

Looking forward, speculators in the City are betting that the Halifax Price Index will be down 6% by June. The HPI is like a super tanker and takes time to change direction. Our own data suggests that it is the relatively low numbers of new properties coming onto the market that has kept prices up so far but we expect more homes to come available in the Spring as more people are forced to move as their financial circumstances change and money becomes tighter.

Finally, one trend not previously seen has been the number of sellers who changed their agent in recent months. As the Primemove technology gets to see new properties as they come onto the market we can see if these are genuinely new homes or if they have been marketed by another agent before. Over 17% of homes on the market on 1st January had been on the market last year with another firm and in most cases, they had new, lower asking prices.