Trick of the eye

Three reports out today suggest that there may be some reasons to celebrate and that there may be life the UK housing market. However, despite each being put out by respected organisations, It’s no surprise that each has strong ties to those who would like to earn a crust by actually selling homes. To suggest that the glass is half full is one thing but these people aren’t looking through rose-tinted spectacles, they are mistaking a dead parrot for one that has expired!

The National Association of Estate Agents has calculated that each agent has agreed 10 sales in April, well up on the five last August. What they don’t seem to acknowledge is that since the peak of the boom they themselves estimate that around 3,000 agents have shut up shop. Might it actually be that the apparent rise is down to just dividing a pathetically similar small number of sales by a much smaller number of estate agents?

Rightmoves’ monthly survey out this morning has more attractive rises but in amongst the headlines they confirm that the number of new instructions is down over 50% last month! Asking prices might have risen slightly but only 61,000 new properties were put on the market. In April last year there were 136,000! When instructions dry up there are more reports of some agents ‘valuing for instructions’ giving clients an inflated view of the price in the hope of getting the job. It’s not surprising perhaps therefore that asking prices rose slightly by 2.4%

Finally, Globrix, another property web site trumpets the fact that they counted over 100,000 new properties coming onto the market. Some argue that Globrix is still playing catch up to Rightmove so perhaps they just have more houses to register but as with Rightmove, whilst these may be record volumes this year and double digit percentage increases on January but we are coming off historic lows.

Don’t be fooled by talk of percentage increases. Two sales may be a 100% increase on one but it’s still only two! Before we crack open the champagne, remember that according to the Council of Mortgage Lenders last week, average loans to value were just 75%. With average house prices still over £150k, this means that buyers are having to scrape together nearly £40,000 as a deposit out of taxed income. (Average pay is just £26k). How many can do that without a parliamentary allowance?