The drought in house sales continues according to latest figures for May released this morning by the Tax Man. Just 68,000 homes are recorded in HMRC’s monthly report of homes sold over £40,000 across the UK which compares with the 71,000 in May last year.
Back in May 2007 over 140,000 homes were sold. Despite the optimism shown yesterday (Monday) in the Rightmove survey of average asking prices it is clear that buyers won’t move. Like the water shortages across much of England the drought in house sales is now a cause for concern.
Much of the wider economy relies on a healthy housing market with money spent in the High Street on home improvements as people buy and sell. Many jobs in the building and decorating businesses rely on a health turnover as well as those more directly employed like mortgage brokers, conveyencers and estate agents. Whilst you are unlikely to shed a tear for unemployed agents the money taken out of the housing market, spent on white goods, cars and invested elsewhere all contributes a significant amount to UK plc. This investment is drying up fast!
Last year there were 884,000 homes sold across the UK. This compares with over 1.66m in 2006. This year we could see fewer than 800,000 homes change hands. Most people worry about prices and may not see the connection with trading volumes but what this trickle of sales shows is that buyers are going on strike, unable or unwilling to pay the prices that sellers want. Average sale prices recorded by Land Registry and by lenders like Halifax are a record £75,000 lower than the average asking price reported by Rightmove.
The value of your house is based on what other homes sell for, not on how much their optimistic owners were asking!