The Greek effect.

Publication of the June report from HM Land Registry on Tuesday brought the final data to provide a summary of the health of the housing market half way through the year and with it some pretty important numbers.

The number of homes selling remains extremely low with just 2,194 selling across the UK every day (Source – HMRC). The long term average is 3,474 with 5,333 selling each day in February 2007.

5,115 new properties came onto the market every day last month, not too far short of the 5,244 that do normally although 8,210 were put on every day in May 2006.

The number of homes in London selling for more than £2m in March increased 85% on March last year and was 489% higher than March 2009! (HM Land Registry)

The number of months of unsold inventory (used as a guide to the ratio of homes for sale and the rate at which they are selling) over the last decade has averaged 12 months with a low of 7.6 months in December 2006. Today we have 15.4 months of stock.

At this rate and with the current volume of new supply coming onto the market the chances of a home selling in the first month of marketing is just 6% and if left on the market for 12 months is only 29%. It would normally be closer to 44%.

The gap between average asking prices ( and average sale prices (Land Reg) is at an all time high of £78,571. Whilst the two ‘baskets’ are not exactly comparable the trend suggests that sellers remain over-optimistic and those few that are selling are taking much less than they are asking. The long term average is £52k.

The total value of homes sold across England & Wales was £7.2bn, down 14% on March last year.

The number of homes worth more than £1m that sold across England & Wales in March was up 40% on the average with 200 properties over £2m sold compared to the usual 90 that sell in an typical month.

Normally we would expect just 3.4% of all sales in London to be over £1m. Last month more than 8% of all sales were at the top end of the market.

Cash buyers (those not dependent upon mortgage finance) still remain a hugely significant proportion of the market with around 40% of the relatively few transactions taking place without the need of a loan. Over the long term cash deals typically represent around 28% of transactions.

You can see these numbers and more by clicking here

The market remains extremely sensitive. Supply is arguably too good whilst demand from those who can actually transact remains very weak.

Sellers haven’t got the message with asking prices getting too far ahead of sale prices or values. Those few who are actually selling are often taking far less than they were asking.

“Cash buyers account for around twice the number of sales that we would normally expect which has an impact on the monthly surveys from lenders like Halifax and Nationwide. Their numbers don’t count the 40% of buyers who didn’t need a mortgage!

Estate agents at the top of the market have been making out like bandits with sales of homes over £2m in London 489% higher than in the same month two years ago. I expect this trend to continue as international buyers continue to flood the Capital with many prepared to risk paying 20% over the odds for a piece of ‘safe’ UK real estate rather than risk loosing their fortune to civil unrest and subsequent ‘redistribution’ of wealth’. (Expect Greeks bearing gifts in the form of used Euro’s over the coming days as the crisis there plays out).

Whilst those at the top of the ladder escape the worst of the difficult market not everyone is immune. If you put your house up for sale today you have a 6% chance of selling in the first month and less than 30% chance over a year. Selling a house remains almost as difficult as persuading a Greek he should pay more tax, over-paying is very easy as asking prices offer little help as a guide to value and buyers requiring finance continue to struggle to get acceptable terms.

We are in for a long hot, frustrating summer!

Henry’s graphs –
Land Registry –
Rightmove –