Latest figures from the Land Registry this morning confirm the negative trend reported by Nationwide and Halifax but it is sluggish sales volumes that has estate agents reaching for the Valium.
According to the Land Registry the average price of a home in England & Wales is now £166,769, a 0.2% fall from £167,423 last month, more than the £158,377 recorded in September last year but 9.3% below the peak of £184,674 achieved in January 2008.
However, as with all markets, transaction volumes are vital for reliable conclusions to be drawn and these continue to comply with Newtons laws of gravity. In July 64,411 properties were sold in England & Wales – just 1% more that in July last year.
The market would usually expect around 82,000 sales a month. The number of new buyers registering with estate agents has fallen off lately with many still finding it harder than they had expected to secure finance. However the main problem today is the credibility gap between the price sellers are asking for their homes and what buyers are prepared to pay. These are the classic symptoms of a falling market.
Average asking prices rose 3.1% to £236,849 last month according to the web site Rightmove. At the same time the Halifax recorded a 3.6% fall in sale price leaving a gap of £74,000 between the two. There had been some confusion as to whether sale prices were in fact sliding but the Land Registry report confirms today that the gap between buyers and sellers is as wide as ever.
The market is defined today by an excess of sellers sitting on a paper profit but who will only sell for ‘their’ price. The few sales that are actually happening are often being done at much lower prices and volumes will remain tight until sellers understand that the difference between ‘aspiration’ and ‘actuality’ for many of them is about 20%!