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Instructions Plummet 55% To Six-year Low, Reveals Rightmove

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Instructions plummet 55% to six-year low, reveals Rightmove

Instructions plummeted 55% to 61,000 in May, reveals Rightmove’s latest House Price Index.

It is the lowest level since 2003. There were 135,000 new sellers in May 2008. Agents’ unsold stock levels total 71 per branch, down from 72 in April.

Miles Shipside, commercial director at Rightmove says: “Equity poor home owners are either not coming to market, or are tempted to give it a go only by setting their asking price bar too high. With new sellers in short supply, those thinking of selling will also attract bullish asking price suggestions from estate agents starved of the opportunity to market fresh stock.

“The net effect of both these factors is a largely unjustified upward pressure on initial asking prices, which can lead to months of ongoing price reductions as sellers realise that buyer finances are similarly stretched. However, there are a few areas where property to buy is so limited that achieved prices have increased over the last few months.â€

Rightmove’s HPI reveals that the average UK property asking price has increased by 2.4% to £227,441, up from £222,077 in April, though prices declined 6.2% year-on-year.

On a regional basis, the shortage of property is most acute in London, where supply has slumped by 66% to 11,478. This compares to 33,479 properties put on the market in April.

Average asking prices in London increased 2.7% to £397,646, up from £387,161 in April, though they are 1.7% down on May 2008 when the average price was £404,541.

The limited supply of property in the capital has prompted London-based Cluttons to moderate its Central London Forecast. The agency has adjusted its forecast to predict a 10% fall in prices in 2009, with a levelling off in 2010. It claims that this will be followed by a return to positive house price growth in 2011. It says that a strong demand from international purchasers together with a more limited supply of property than expected given the loss of wealth and jobs in the capital, have led to this moderation in the overall fall in values.

James Hyman, partner for residential sales at Cluttons, says: "London remains in the grip of a sharp recession, but its position as one the world's principal business centres will underpin the city's recovery. It is still the city of choice for leading businesses and consequently demand to own property here will remain strong in the long run. The market will also continue to benefit from the improved affordability for foreign buyers, given the sharp fall in sterling versus most major currencies."

Just another nail in the housing market. It is only a matter of time before the majority of folks on mortages and in equity are no longer. Rates will rise as convenants are broken to further push down the bottom line.

Remember, this is just the dodgy 'rightmove' data. If they are saying it's bad out there, then surely it is much worse.

There are going to be an awful lot of disappointed house punters two to three years for now, and holding out for the 'big' selling price will only exacerbate the situation; especially as jobs will continue to be wiped out on a grand scale, government spending cuts will kick in and taxes will skyrocket....and ultimately your neighbors will end up selling for half of what you are asking, being the stubborn hold out type that the majority of 3-4 year old mortgage holders are.

The predictions in the article are pants though, based purely upon fanciful and hopeful speculation. There are currently no fundementals within the economy to justify any return to housing inflation.

People will however still cling to the notion that a big mortgage is wealth. Banks are the only winners.

Edited by cashinmattress

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Instructions plummet 55% to six-year low, reveals Rightmove

Just another nail in the housing market. It is only a matter of time before the majority of folks on mortages and in equity are no longer. Rates will rise as convenants are broken to further push down the bottom line.

Remember, this is just the dodgy 'rightmove' data. If they are saying it's bad out there, then surely it is much worse.

There are going to be an awful lot of disappointed house punters two to three years for now, and holding out for the 'big' selling price will only exacerbate the situation; especially as jobs will continue to be wiped out on a grand scale, government spending cuts will kick in and taxes will skyrocket....and ultimately your neighbors will end up selling for half of what you are asking, being the stubborn hold out type that the majority of 3-4 year old mortgage holders are.

The predictions in the article are pants though, based purely upon fanciful and hopeful speculation. There are currently no fundementals within the economy to justify any return to housing inflation.

People will however still cling to the notion that a big mortgage is wealth. Banks are the only winners.

Are fewer instructions bearish?

I would have thought not.

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Are fewer instructions bearish?

I would have thought not.

?

Surely you jest - the economy is based upon the house market and house selling. No instructions = no house sales = no economy.

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Agree, lower supply = higher prices.

Only if demand remains static or increases.

More houses will be coming onto the market this Autumn and Winter as owners are forced to sell.

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?

Surely you jest - the economy is based upon the house market and house selling. No instructions = no house sales = no economy.

True, house sales generally do help the economy (or were you being ironic?) but fewer houses on the market would tend to indicate fewer desperate sellers.

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True, house sales generally do help the economy (or were you being ironic?) but fewer houses on the market would tend to indicate fewer desperate sellers.

But unemployment is rising relentlessly and it takes several months for people in that position to get into arrears to the point where they are forced to sell. This will start happening over the Winter.

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But unemployment is rising relentlessly and it takes several months for people in that position to get into arrears to the point where they are forced to sell. This will start happening over the Winter.

No need to sell for atleast 2 years as the state will pay your mortgage interest if you are unemployed.

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Is there any statistical evidence that a lack of supply, such as this, in itself has a significant impact on prices? After all, if there are 20,000 potential sellers refusing to put their house on the market for whatever reason, equally there are 20,000 fewer buyers in the market. Supply and demand overall cancels itself out.

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Are fewer instructions bearish?

I would have thought not.

And you would be correct. This is bad news for us bears.

Welcome (back?) by the way.

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No need to sell for atleast 2 years as the state will pay your mortgage interest if you are unemployed.

But not for anything you have MEWed onto it- this is where a hell of a lot of people are going to come very unstuck.

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No need to sell for atleast 2 years as the state will pay your mortgage interest if you are unemployed.

an important point that most on here ignore and its this point along with redundancy payments as to why i dont think the proper crash will start until 2011 thru 12, until then forced sellers will be few and far between in the mid priced housing market

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True, house sales generally do help the economy (or were you being ironic?) but fewer houses on the market would tend to indicate fewer desperate sellers.

Not in this case. It represents the fact that there are many people who simply cannot sell because they are under water.

The full effect of the recession is being delayed by a concerted series of actions by the authorities. The result of this is to build up a 'head of steam' for when things crack.

This is a downward spiral. My mother is an example of a would be downsizer who remains trapped between the following forces.

1) There are few houses of the type she is looking for available right now.

2) Smaller houses still cost more than she can afford once she has sold up.

Its a complex market, and we are in unusual conditions with uncharacteristic low volumes of sales and demand. The effect on the broader economy is quite serious as so many aspects of consumption depend on housing transactions.

Until prices drop, transactions will not rise substantially. While the government may want to support house prices for political reasons, ironically this will damage the economy by keeping transactions low.

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?

Surely you jest - the economy is based upon the house market and house selling. No instructions = no house sales = no economy.

Spot on.

This country has been reduced to a place where, until very recently, the RAISON D'ETRE was to sell each other properties....

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Agree, lower supply = higher prices.

Disagree. At the moment, lower supply=higher asking prices.

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How do you explain the rise in Halifax/Nationwide?

This was predicted on here since the beginning of the crash, including by myself. It is the Bull Trap

The sun is shining. That's all there is to it. When Winter comes, we will one again be in House Price Armageddon.

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Strange market admittedly, but a lot of properties that sold are coming back available. All is not lost - hang on a while longer.......... In the meantime, I got piss*d off with waiting & I'm off to play in Canada shortly for a few weeks/months - get completely away from it all. :P

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This was predicted on here since the beginning of the crash, including by myself. It is the Bull Trap

The sun is shining. That's all there is to it. When Winter comes, we will one again be in House Price Armageddon.

Can you see a bull trap of this size in Spring 2010?

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Are fewer instructions bearish?

I would have thought not.

Maybe short term, as long as people are not convinced prices will fall further.

The fear/hope (delete as apprppriate to your bias) isthat lots of forced sales will mean too many houses and not enough buyers, and so big falls in prices.

Factors in favor of this theory are:

Rising unemployment

Rising mortgage rates (already seeing rising fixed rates)

Rising interest rates in the future

Even without fewer properties to market, there is always:

Fewer people with high deposits/cash buyers to be in a position to purchase (numbers must be limited surely...?)

Mortgage availability drought

No support for prices medium term - none.

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One way to look at what's happened is to transfer it to another field.

If you walked into your supermarket and found that there was only half or a third the normal amount of food available, you would expect prices to rocket.

So the fact that there's so much less available, but prices have only gone up by a few percentage points is actually a sign of just how weak the market is. (Imagine the prices that would have been acheived if such a drop had happened during the boom!)

To me, the interesting thing at the moment is not what the moves in prices are, but why there are so few sellers and when will they come back.

My best guess is that it's classic 'sticky on the downside' psychology where people are reluctant to take a loss for emotional reasons.

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One way to look at what's happened is to transfer it to another field.

If you walked into your supermarket and found that there was only half or a third the normal amount of food available, you would expect prices to rocket.

But if there's only half or a third of the customers requiring the food, the average price will not rocket at all.

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One way to look at what's happened is to transfer it to another field.

If you walked into your supermarket and found that there was only half or a third the normal amount of food available, you would expect prices to rocket.

If you walked into your supermarket with next to no money in your pocket and no real sign of getting any (aka unemployed) and less food on the shelves, then found the prices went up marginally, then you would go shopping to Aldi or Netto or whatever.

Aldi = bargain but required sustinance

However people don't need to buy a house. So the comparison probabably becomes mute.

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