National Inventory Of Homes For Sale Hits All-Time Low

[long time lurking]

Its the same for hotels and commercial property.

Cant sell wont sell

Would love to see what the prices for houses would be if the lending was the same terms as commercial.

I think they will raise rates to get things moving as their low rates have zombified everything.

I hope you are right

[Wurzel Of Highbridge]

The UK workers can ask / demand higher wages so they can stay in their homes but companies are not really concerned about this; all companies care about is profit and tax avoidance. If the work can be moved it will be, as unfortunately has happened with your job, sorry about the loss of your job and hope things work out for you.

The onus will fall back on the government to stop people being evicted. The government have enabled people to get into massive debt via FLS, are allowing more debt via HtB so the government will be expected to bail them out with SMI 2.

What is a company with no employees worth? Zero.

I am also not so sure that every job can be off shored, in the case with my last position it was easily moved as the company already had a Bangalore office established, but they still need employees here to oversee the work and check that it conforms to the requirements.

In my case the sales figures were just not adding up, so the expensive offices in Australia, US, UK, Ireland and Canada were culled, all the staff in the Bangalore office were kept on primarily because they cost 10% of what we do and they produce work of a comparable quality.

Edited December 13, 2013 by Gone to Ireland.

[Ash4781]

This is from Foxtons' interim management statement in Nov'

Outlook

London property sales transactions in 2013 have so far remained relatively flat due primarily to a shortage in the supply of property for sale and low mortgage availability. It remains to be seen whether the recent Government help to buy initiatives and the early signs of a pick-up in mortgage activity ultimately lead to a significant increase in market volumes but these dynamics are expected to materialise slowly.

I doubt this applies to Foxtons but there is a danger EA's (anyone can setup as one so it's competitive) will see margins slip fighting for business. I have seen locally more agents offering 1% deals but whether this eventually translates into a lower margin I do not know. In practice I don't know if you can just open up an agency. I have spoken to agents who have warned about competitors. Though not quite as bad as double glazing salespeople

edit: I get the impression that lettings can be the real wild west

Edited December 13, 2013 by Ash4781

[okaycuckoo]

Think HonestEA covered this in his anecdotals thread.

Basically vast numbers of people bought 2006-08 (I'd say 2004-08) at peak or close to peak prices and simply have too little equity to move.

Yeah. We managed to get HonestEA's latest post stickied, because it had an interesting forecast of sales in early 2014. Can't find it now.

I wonder if the OP article is really about houses, and not flats/apartments. It talks about "property" but says average asking price is c.£260k. I often come across entire blocks of flats for sale, signs outside look like a poison fruit tree.

[worzel]

It certainly feels to me like stock is extremely low. I really hope there are some more houses coming to the market next year as we are one of the few that have bought since 2009 and can afford to trade up. Estate agents seem to think that low levels of stock mean that they can put forward very high valuations. I guess they need to to get the business, but it will be self defeating for them. Our situation is not helped by the fact that there are other buyers out there prepared to go in with really high bids relative to asking price, which as an HPCer I find very hard to do!

[ReggiePerrin]

This lack of supply is one of the most noticeable aspects of the post-crunch UK housing market and therefore poses the biggest question. Why has there been such a marked lack of supply? They keep reporting it but very few speculate on why it is happening:

FACTORS INCREASING SUPPLY:

1. Lowering real wages creating mortgage repayment difficulties creating forced sellers

FACTORS DECREASING SUPPLY

1. (Recently) expectation of future HPI gains delaying potential sellers
2. Valuations being in negative equity territory locking people into current location
3. Banks not repossessing non performing mortgages (to avoid crystallization of loss on their books)
4. BTL culture spreading into 'inherit to let' on deceased parent's homes?
5. Low wages and savings preventing potential second steppers moving up
6. Low new build numbers
7. Poor jobs market meaning less relocation churn in sell to buy

Any others?

Clearly the supply constricting factors are dominating.

I'll have a go at another one..

An increase in the avg age of the FTB; If you bought in your early 20's you're just starting your career, hence there's scope for further wage increases as you progress, combine that with some increase in the value of the house and you can afford to move up the ladder. If you're a first time buyer in your thirties on or near peak earnings and you have to stretch yourself financially to get on the ladder, you ain't going nowhere fast. So supply is constrained by 30 something FTB'ers stuck in a one bed rabbit hutches.

On the same theme; propaganda states that you must 'own' a house before you can have children, buy at thirty and you're going to have [expensive] kids a lot sooner than someone who buys in their twenties...

[disenfranchised]

Talking to a 30 year old last week about to FTB in Leighton Buzzard. Estate agents have told her to expect 30% HPI in the next 2-3 years.

They seem to think London prices will ripple outwards to everywhere in commuting distance. I hope they are wrong, but I'm beginning to wonder.

Another woman at work in her early 40's has just maxxed herself to trade up into a new build.

Most of the people I know buying seem to be female.

[juvenal]

In past years I've seen up to 40 for sale in my bit of BH15 Bournemouth/Poole. Normally about 30 properties for sale.

Today there are 7.

Can't understand what's going on.

[Venger]

The national inventory has hit an all-time low, property search engine Home has reported.

It says the overall volume of property for sale is now 38% lower than six years ago in December 2007.

Past 18 months I've had to fend off a few claims supply is perfectly normal; people trying to mess with my head.

FACTORS DECREASING SUPPLY

1. (Recently) expectation of future HPI gains delaying potential sellers
2. Valuations being in negative equity territory locking people into current location
3. Banks not repossessing non performing mortgages (to avoid crystallization of loss on their books)
4. BTL culture spreading into 'inherit to let' on deceased parent's homes?

Definitely those. And I've read many cases where people who would have struggled to keep their home, were it not for extraordinary stimulus measures, thinking isn't life brilliant... itching to upsize and doing exactly that, renting out their previous home. So for the supply that is there, still having to compete with all these victims in the current market (Starla's anecdote thread), and HTB2-ers, setting values for the whole market when they happily borrow more to pay high prices.

[the_duke_of_hazzard]

The cost of moving is high too:

estate agent fees

legal fees

stamp duty

removal company etc

most of these have gone up disproportionately in the past few years

I explained to my dad once that buying a house would cost me a year's rent before I've moved into the overpriced hovel... he pointed out that the only stamp duty he'd paid was the stamps to the solicitor and the lender.

[Venger]

The national inventory has hit an all-time low, property search engine Home has reported.

It says the overall volume of property for sale is now 38% lower than six years ago in December 2007.

It says the “supply crisis” is frustrating in the hottest regional markets which show no sign of rebalancing.

According to Home, which takes property listings from virtually every single estate agency website and portal in the country, there are 481,000 properties currently for sale. In late 2007, there were 771,000.

Let's hope more home-owners have done some thinking over Christmas.. scratching their fat warm full bellies, maybe deciding to test the market this year. Costs them almost nothing to test the market.

Of course they won't sell it for much less than it's worth (new peaks in many instances), with so much credit chasing little inventory. Unless rising living costs beginning to bite a bit more, which is another reason I'm against Ed's energy intervention, helping widows staying in 4 bed family homes, instead of downsizing.

31 December 2013

January sales: Five alternative discounts on offer

By Kevin Peachey Personal finance reporter, BBC News

http://www.bbc.co.uk/news/business-25333266

Homes

The new year tends to prompt a pick-up in housing market activity. With house prices starting to rise sharply again across the UK, there are unlikely to be many bargain basement deals in the housing market.

However, estate agents say January is the time when the a whole host of new properties are put up for sale. Seller behaviour means that the free time over Christmas is when many families come to a final decision about whether to put their home on the market, according to Jan Hytch, president of the National Association of Estate Agents.

That means that the new stock in the new year feeds through to increased sales a few months later, known in the industry as the "spring bounce". In contrast, very few properties are marketed in November and December, which means very few sales are completed in January. Transaction figures from HM Revenue and Customs (HMRC) show that sales in January and February are around two-thirds of the levels seen in the summer.

[bearwithasorehead]

Simple. Most people will look at the market, decide everything is too expensive, too crap, or both, and wait till next year.

At least I hope they will. That's what I keep doing.

This, especially for second steppers.

[goldbug9999]

This lack of supply is one of the most noticeable aspects of the post-crunch UK housing market and therefore poses the biggest question. Why has there been such a marked lack of supply? They keep reporting it but very few speculate on why it is happening:

FACTORS INCREASING SUPPLY:

1. Lowering real wages creating mortgage repayment difficulties creating forced sellers

• Downsizers trying to realise equity gains

[dances with sheeple]

• Downsizers trying to realise equity gains

People will cling to the idea of the "gains" they have made until rates rise to a point where the penny drops in their little heads, or there is a full blown banking crisis or something else that causes HPC 2 to get going. Personally I am glad not to be sitting on massive debt that I can barely service, even at rock bottom rates, hoping against hope that reality doesn`t re-assert itself. What a half assed position to be in!

[winkie]

It certainly feels to me like stock is extremely low. I really hope there are some more houses coming to the market next year as we are one of the few that have bought since 2009 and can afford to trade up. Estate agents seem to think that low levels of stock mean that they can put forward very high valuations. I guess they need to to get the business, but it will be self defeating for them. Our situation is not helped by the fact that there are other buyers out there prepared to go in with really high bids relative to asking price, which as an HPCer I find very hard to do!

No surprise that stock is low when it is now very fashionable to use homes as investment vehicles.....in it for the long term....nobody has repaid enough or has been getting high enough salary increments to move onwards and upwards and they are not building enough homes to house all the people that have been encouraged to come, along with smaller family units and broken family or single family units.....magic.

[Neverwhere]

With half of the reduction in sales volumes coming from the length of time properties are spending on the market doubling http://www.home.co.uk/guides/time_on_market_report.htm?county=londonnw&all=1 surely "Growing demand and diminishing supply" isn't an accurate reflection of the market, surely if demand had remained static let alone grown then the diminishing number of properties on offer would be causing the amount of time they spent on the market to constrict rather than expand... ?

[bearwithasorehead]

With half of the reduction in sales volumes coming from the length of time properties are spending on the market doubling http://www.home.co.u...=londonnw&all=1 surely "Growing demand and diminishing supply" isn't an accurate reflection of the market, surely if demand had remained static let alone grown then the diminishing number of properties on offer would be causing the amount of time they spent on the market to constrict rather than expand... ?

I think you might be on to something there.

[winkie]

With half of the reduction in sales volumes coming from the length of time properties are spending on the market doubling http://www.home.co.uk/guides/time_on_market_report.htm?county=londonnw&all=1 surely "Growing demand and diminishing supply" isn't an accurate reflection of the market, surely if demand had remained static let alone grown then the diminishing number of properties on offer would be causing the amount of time they spent on the market to constrict rather than expand... ?

Expensive property will always remain on the market......people will not pay any price that is asked, they will compare to prices sold of similar property in area over previous months.......over priced property will stick, demand is never that great that sane people will pay any price, they are not that desperate for a few extra feet of space.

[dances with sheeple]

With half of the reduction in sales volumes coming from the length of time properties are spending on the market doubling http://www.home.co.u...=londonnw&all=1 surely "Growing demand and diminishing supply" isn't an accurate reflection of the market, surely if demand had remained static let alone grown then the diminishing number of properties on offer would be causing the amount of time they spent on the market to constrict rather than expand... ?

Diminishing demand + Diminishing supply of credit + Rising interest rates = One Big Mess for the over-extended

[Neverwhere]

Expensive property will always remain on the market......people will not pay any price that is asked, they will compare to prices sold of similar property in area over previous months.......over priced property will stick, demand is never that great that sane people will pay any price, they are not that desperate for a few extra feet of space.

Absolutely. On this data I wouldn't be surprised if H2B actually increases the length of time properties remain on the market as pent up pressure to sell combines with a belief in rising HPI and an abundance of willing buyers that simply don't exist at these prices . . . nominal price increases equal decreasing demand that may continue to rise on a small number of transactions but have essentially stalled the market?

Having said that this is totally counter to my (anecdotal) experience of the very last stragglers in my 30 something peer group jumping on to the property bandwagon or preparing themselves to do so. They at least have the good grace to look shifty when we discuss the maths behind this, but when really pushed they seem to be unbothered by any of the monetary costs involved. I don't know whether this is protective self-delusion or that easy credit has totally devalued sterling in the privacy of their own minds regardless of the fact that many of them earn average or sub-average wages.

[dances with sheeple]

Absolutely. On this data I wouldn't be surprised if H2B actually increases the length of time properties remain on the market as pent up pressure to sell combines with a belief in rising HPI and an abundance of willing buyers that simply don't exist at these prices . . . nominal price increases equal decreasing demand that may continue to rise on a small number of transactions but have essentially stalled the market?

Having said that this is totally counter to my (anecdotal) experience of the very last stragglers in my 30 something peer group jumping on to the property bandwagon or preparing themselves to do so. They at least have the good grace to look shifty when we discuss the maths behind this, but when really pushed they seem to be unbothered by any of the monetary costs involved. I don't know whether this is protective self-delusion or that easy credit has totally devalued sterling in the privacy of their own minds regardless of the fact that many of them earn average or sub-average wages.

[John The Pessimist]

Conventional HPC wisdom is that the banks are delaying foreclosures because they don't want to crystallise their losses. However, if inventory is low and the Market is as buoyant as MSM is leading us to believe, surely this the time for the banks to act on debtors in arrears & default.

Summat isn't adding up....

[bearwithasorehead]

Conventional HPC wisdom is that the banks are delaying foreclosures because they don't want to crystallise their losses. However, if inventory is low and the Market is as buoyant as MSM is leading us to believe, surely this the time for the banks to act on debtors in arrears & default.

Summat isn't adding up....

Nah, while rates are low and QE continues forbearance can continue. The govt is hoping wages in private sector will rise while rates are held down. banks don't care as long as they don't have to crystalise losses. If market improves then they can continue to forbear as the number of households in NE will decrease.

Only time will tell if this juggling trick can defy economics.

[Neverwhere]

Nah, while rates are low and QE continues forbearance can continue. The govt is hoping wages in private sector will rise while rates are held down. banks don't care as long as they don't have to crystalise losses. If market improves then they can continue to forbear as the number of households in NE will decrease.

Only time will tell if this juggling trick can defy economics.

If they're waiting for a London ripple effect to drag those in arrears back into PE and then start foreclosures increased supply could itself trigger a crash, depending on how it's managed. Is it possible that the long term plan is to clear the books at a market top and foreclose on all those in or in danger of arrears (perhaps even intentionally pushing people into arrears) once NE has decreased then allow or even encourage a HPC on the basis that the majority of remaining mortgage holders will fight tooth and nail to retain their homes and lower house prices will encourage a whole new raft of mortgage customers through the doors? After all negative equity is only a concern for the banks if the mortgage holder falls into arrears, even then it doesn't really show up on their books unless they choose to foreclose, and even then they don't have to give up on the outstanding amount until the former-home owner declares bankruptcy or they decide to stop pursuing it. So low house prices would seem to mean nothing to them: as soon as they've extracted maximum mortgage uptake from the current market conditions there should come a point where potential loses from negative equity foreclosures are outweighed by potential profits from new mortgage holders in a lower valued housing market.

Or have I been reading too much Machiavelli?

[sleepwello'nights]

If they're waiting for a London ripple effect to drag those in arrears back into PE and then start foreclosures increased supply could itself trigger a crash, depending on how it's managed. Is it possible that the long term plan is to clear the books at a market top and foreclose on all those in or in danger of arrears (perhaps even intentionally pushing people into arrears) once NE has decreased then allow or even encourage a HPC on the basis that the majority of remaining mortgage holders will fight tooth and nail to retain their homes and lower house prices will encourage a whole new raft of mortgage customers through the doors? After all negative equity is only a concern for the banks if the mortgage holder falls into arrears, even then it doesn't really show up on their books unless they choose to foreclose, and even then they don't have to give up on the outstanding amount until the former-home owner declares bankruptcy or they decide to stop pursuing it. So low house prices would seem to mean nothing to them: as soon as they've extracted maximum mortgage uptake from the current market conditions there should come a point where potential loses from negative equity foreclosures are outweighed by potential profits from new mortgage holders in a lower valued housing market.

Isn't the market now distorted by the secondary mortgage market. I thought the UK was like the US where the functions of selling, servicing and financing a mortgage were separated. I know there are portfolio lenders who will still adhere to the traditional model and sell, finance and service the mortgage themselves but how developed is the uk secondary mortgage market compared to the US?

If the secondary mortgage market is sufficiently developed in the UK then mortgage sellers are likely to be relatively unaffected by the repayment performance of the borrower, they have sold the loan with its risk to another.