Seven major indices are published every month and any number of ad hoc property surveys. Of course no one report truly represents what is happening everywhere across the UK. Some, like the Land Registry only covers England & Wales. To add to it’s drawbacks part of it’s report is based on transactions three months previously and their chosen method, called ‘Repeat Sales Regression’ only uses 6m of the 16m sales they have recorded since January 1995. Add to that the sales that are not included (those involving a company for example) and you can appreciate that it’s a helpful but not infallible guide. Just look at the recorded values for central London for instance.
Rightmove record asking prices (or greed!), the Communities & Local Government ‘index of indices’ is being reviewed by the dynamic duo of Shapps and Pickles. Hometrack only tracks about 6,000 deals and Halifax and Nationwide report on the mortgages they offer which between them amount to about 14,000 of the 81,000 properties sold last month.
Other numbers that may surprise you. There are 24 million homes in the UK or which about 13.6m have a mortgage on them. Usually around 15% of all sales are ‘cash’ deals. Currently this is running at 30%. London and the South East represent 30% of all sales in England & Wales. East Anglia 11% and the North East, like Wales just 5%.
I choose to ignore the RiCS survey which despite the coverage it gets I believe is a nonsense. A survey of ‘the feelings’ of 250 surveyors may generate good PR but I’ve yet to meet an estate agent at the coal face who has any regard for the RiCS report. So keen are RiCS to claim everything ‘property’ that I imagine a story of Lost Property would result in a spokesman from Great George Street (sorry, Parliament Square) rushing out to bemoan the fate of Paddington Bear!
With the Land Registry report published last Friday we now have all the main numbers for July. Here are the principal conclusions when comparing the activity and prices reported with the same month all the way back to 2003 for comparison.
The total number of homes on the market has jumped 33% compared to last July and is now just below the long-term average.
New instructions are coming on at the rate of 4,189 a day. A 41% increase on last year but below the number in July 2006 (7,714) and the long term average of 5,394.
Property is selling across the UK at the rate of 2,613 a day. This is just 3% more than last year and 1,000 below the long term average. In my opinion this is the major cause for concern.
Average asking prices in July were just 4% above 2009 but are a staggering £65,443 more than the average selling price recorded by Halifax. This figure goes some way to explaining why so many agents think that prices have held up. It’s almost impossible for agents to confirm that prices are once again under pressure but privately many agree. This autumn one of the only weapons in the arsenal is a price reduction.
During the downturn expensive properties suffered just as cheaper homes did. Sales of homes over £1m dropped to 265 in July last year leaving many of the blue ribband agents suffering. At 426 volumes are now back to their average and on a par with volumes in 2006 and 2008.
Just 81,000 homes sold across the UK in July. If you add the number of homes already on the market to the number expected will come on in September then just 8% of all the properties offered for sale next month with actually sell. I don’t buy the oft-repeated cry for “more instructions’ or react well to the blizzard of leaflets that some agents insist on sticking through my front door claiming to want more homes to sell. There seem to be quite enough unsold properties already.