There’s a great white shark in the housing market.

The number of new properties coming onto the market jumped 78% last month compared to the same period last year. In April 121,000 new homes came onto the market compared to just 67,000 in April 2009. The totals for May reported by estate agents are expected to be even bigger as the demise of Home Information Packs removed the perceived cost of putting a property onto the market.

Across the country the number of homes that actually sold is also up on last year with sales across the UK reported by HMRC 24% higher at 78,000. The latest report from the Land Registry to be published on Tuesday morning is expected to confirm that sale prices are still higher than they were 12 months ago although the trend so far this year is actually slightly down.

However it’s the gap between asking prices and sold prices that remains most worrying with an average £68,000 difference between what estate agents want and what they are actually selling for. (Rightmove ave. asking price £237k vv Halifax ave. sale price £168k – see chart 1)

A Great White shark is swimming in the blue waters of the housing market this summer. The emergency Budget on 22nd June is frightening 80% of buyers away. There are plenty of homes for sale but people expect taxes to rise for the majority and most home buyers expect to be included in that majority. The idea of a quick dip when you suspect there to be a feeding shark in the water is off-putting for all but the most foolhardy.

We have seen the number of homes selling every day increase by 500 from last years record lows of just 2,100. (See chart 2). The 24% increase in demand however is not matching the number of new properties coming onto the market which increased by 1,776 a day. This 78% increase in supply shows little sign of a being mopped up by new buyers some of whom are still struggling to come to terms with new lending rules which will leave many unable to move.

As a result of this imbalance we must expect prices to suffer through the remainder of the year. If you’re selling then it is essential to be competitive compared to other homes that your buyer could choose. If you are a genuine buyer with the ability to perform then the market is yours. The shark has scared away most leaving the golden beaches empty and the waters clear and inviting. Don’t be fooled, he’ll be back!