Although there has been an improvement this January when compared to previous years we are still some way below the average for the time of year.
In particular, we can see that the supply of new properties coming to the market is 20% up on January 2009 but at at 100,000 we are still 40% below the average.
Similarly, the number of homes selling across the UK per day has ticked up by a quarter on the rate last year. Better news for estate agents but we at 2,161 we are over 40% below the average of the past 7 years.
It is perverse and distracting to find that sellers seem to be more optimistic at present with average asking prices up both on last year (6%) and the usual January figure (10%) but the prices that those few who are actually selling are also up according to both the Land Registry and Halifax. However, the latest figures from both sources marked prices down in January compared to December. Easter, an Election and two (possibly even three budgets if we get a second election as a result of a failed hung parliament) are all going to delay any longer-term recovery in the UK housing market.
What is worrying however is that the gap between average asking prices and average sale prices (see graph) is climbing once again and today that gap is nearly £60,000.
The supply/demand ratio is also back to it’s long term average with the number of homes selling per day compared to the number coming onto the market each month fell well below the long term average of 46 in January 2007 to just 37 days. Wild swings such as that seen in January 2005 when we had a whooping 83 days worth of stock despite the rate that homes were then selling indicated the fundamental imbalance that was starting to occur which eventually saw stock levels build to over 1.3m. Today there are less than 730,000 individual homes for sale in the UK. I expect this to swell bringing with it downward pressure on prices.
Cash buyers typically make up around 15% of all transaction. Today around 34% of all deals are done by people either trading down or who are perhaps coming from abroad. Cash buyers rarely get a check valuation on what they buy, are not counted in the mortgage statistics every month but they now represent a significant proportion of the market.
As for transaction volumes across the country, figures obtained from HM Land Registry confirm that the slow down has been balanced across all the ten regions of England and Wales that they monitor. London and the South East accounted for 30% of all sales in December – exactly as they do on average each month.