Green shoots – was it all just hype?

Norman Lamont is the last person to be remembered for talking about ‘Green Shoots’ and it now looks like those who dusted down his old quote over Easter this year were making a similar error.

At the time, “Housing Minister Margaret Beckett claimed there are signs of an “upturn” in the property market despite figures showing prices are still plummeting. The housing minister even warned there could be another house price bubble in the ‘mad rush’ after mortgage lending resumes.
“And property is starting to sell, according to Peter Rollings, managing director of Marsh and Parsons Estate Agents in London. He said he can see demand slowly returning to the market.

In April “The firm said prices in most areas of London had fallen by 25-30% and were back to the levels seen in 2004. Marsh & Parsons revealed it enjoyed double of the agreed sales so far in 2009 compared to corresponding period in 2008.

Tosh!!

I’ve just completed my analysis of the latest Land Registry data and the sales in April (which won’t be formally announced until the end of July) suggest that the green shoots may in fact have been the gardeners nemesis, Japanese Knotweed!

Here are the numbers;-

April 2007 95,254
April 2008 62,370
April 2009 14,572 (so far)

(Conveyancing solicitors may be busy playing golf and therefore not make their returns in the same month so the Land Registry allow three months before formally publishing the totals but they do make those that have been made available. The totals for March and April are therefore provisional but historically these early numbers don’t double).

“There is no doubt that the number of sales taking place has been on the up in recent months as asking prices have increasingly been realigned with the realities of the market,” Tom McClelland of the RICS said on 15th April.

The most recent Land Registry report confirms the dire state for sales in London in February down 59% and sales across England & Wales for the February were 50% lower.

So, talk of green shoots seems to have been wishful thinking at best. Even if the total number of sales in England & Wales for April finally ends up at over 25,000 this will mean a 60% fall in the number of houses that were sold over the traditionally busy Easter period – when according to the Halifax, house prices had already fallen by quarter since the peak of the market nearly two years ago.