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Blues Chick

Rics - House Sales To Drop Another 26 Per Cent Over The Next 3 Months

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"House sales will fall sharply following the UK's shock decision to leave the EU, according to the Royal Institution of Chartered Surveyors.


A downward trend in house sales is expected to continue through the summer as buyers put off their plans amid uncertainty.


Surveyors said house sales were down in June and are expected to drop another 26 per cent over the next three months in the most negative reading since 1998."


Full article: http://www.independent.co.uk/news/business/news/london-house-prices-property-sales-rent-chartered-surveyors-rics-a7137051.html


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Delete thread and start again, please. Sales not prices. I nearly punched a hole in roof of carriage tube with excitement...

Hahaha...I cried and felt like punching someone when I realised it was 'sales'...sorry folks :unsure: At least I remain optimistic...

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Welcome to the forum Blues Chick! Mods please amend the thread title ..... easy mistake to make, and it made rather pleasant reading on such an otherwise gloomy news day ... even if it did turn out to be fiction :)

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Sadly, if my area is anything to go by, that 26% drop will be due to a fall in the number of houses coming to market rather than a fall in the number of mugs willing to buy any old overpriced s***hole.

Since brexit the number of new instructions in my area has fallen off a cliff, pre-brexit it was 5-6 a week (already a ridiculously low number)... post brexit it has been 1-2 a week.

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Welcome to the forum Blues Chick! Mods please amend the thread title ..... easy mistake to make, and it made rather pleasant reading on such an otherwise gloomy news day ... even if it did turn out to be fiction :)

Hi and thanks for the welcome...admittedly, I got a little over-excited and read 'prices' instead of 'sales'...after 10 years+ of waiting for affordable house prices, for one glorious moment I thought 'it' was going to happen :rolleyes:

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Hi and thanks for the welcome...admittedly, I got a little over-excited and read 'prices' instead of 'sales'...after 10 years+ of waiting for affordable house prices, for one glorious moment I thought 'it' was going to happen :rolleyes:

Don't worry about it. For HPCers it's never too soon to get excited. Get excited. Get too excited. Yell. Foam at the mouth. It's never too soon to go crazy!

Hahaha...I cried and felt like punching someone when I realised it was 'sales'...sorry folks :unsure: At least I remain optimistic...

Also you never know...

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Lets not get carried away, new buyer enquiries fell 36% and new instructions fell 40%. We still need a panic amongst vendors. But it's coming.

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Lets not get carried away, new buyer enquiries fell 36% and new instructions fell 40%. We still need a panic amongst vendors. But it's coming.

I agree. I was actually quite disappointed by the report.

It suggested to me that vendors are in no rush to sell...whatsoever. Reason being - low and falling interest rates I suppose.

I'd argue that a crash is unlikely unless some seller motivation is introduced. More likely a stagnating low volume market with a stand off between vendors refusing to reduce and buyers refusing to budge.

Given that interest rate rises look unlikely, what could further compel vendors? My hope is the May administration implement some credible, radical supply side reforms of the housing market. A set of reforms that would challenge / change future expectations. Fingers crossed.

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Lets not get carried away, new buyer enquiries fell 36% and new instructions fell 40%. We still need a panic amongst vendors. But it's coming.

This the part where vendors withdraw from the market in the calculation they can wait out a shaky patch. The question is it that a sensible calculation?

Buy-to-let demand in London is heavily depleted now and there's a very small pool of first-time buyers able to pay current prices.

There will be forced sellers out there - developers for a start, but also the usual crowd.

Once those sellers exhaust the remaining buyers, the market will start to tip and fear will start to set in.

Wonder how optimistic the lenders are feeling these days? I'm waiting for the surveyors to start trimming their valuations - remember in 2008 when buyers started complaining the valuations came in below the price they had agreed to pay?

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This the part where vendors withdraw from the market in the calculation they can wait out a shaky patch. The question is it that a sensible calculation?

Once those sellers exhaust the remaining buyers, the market will start to tip and fear will start to set in.

Who knows but look at the "New Vendor Instructions" graph per page 3 of the report:

http://www.rics.org/Global/6._WEB_%20June_2016_RICS_UK_Residential_Market_Survey_ri.pdf

It's never been lower than it is now and there hasn't been a spike (yet) of new instructions coming to market as there was in 2008. I'm slightly surprised by this as I thought what I had been seeing on RightMove was pretty normalish / healthy volumes.

My worry is that we are heading for a period of stagnation. A standoff - sellers are pigheaded and in many, many cases they will wait because the cost of carry is now so low. Volumes will fall and EA's will go bankrupt in record numbers.

If this scenario does present itself, it will not be tolerated by the government - because of the impact on the economy - who will have two options: 1) A further burst of credit e.g. extending London Help to Buy nationwide as is being advocated by the building industry; 2) Supply side reforms (e.g. 300k home pa) and perhaps even further tax measures.

Both routes would presumably boost volumes but with different and opposite impact on prices. I hope and pray the go down route 2) (rather than 1) as Cameron did) - if they did the question a seller would ask themselves is 'what am I holding off selling for!". Given we are in 2016 and the next election is scheduled for 2020, I'd argue that we are too early for a market saving burst of credit which will probably follow in 2018 / 19.

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I'm not sure EA's will struggle, despite (in my area at least) record low stock levels and sales volumes all the EA's on the high street appear to be doing just fine, fully staffed and more branches than ever

(I have to deliver to them every day so get a good idea how busy they are... and compared to 2008 they're thriving)

I cant see how they're actually making any money on residential sales commissions but must be relying on their income from lettings fees and management.

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When are Rics going to begin advising their valuers to price downwards?

They already have. Valuers have to cut values and they and lenders will not take the liability by deviating from the fact that Brixit has damaged the economy and reduced house prices.

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Who knows but look at the "New Vendor Instructions" graph per page 3 of the report:

http://www.rics.org/Global/6._WEB_%20June_2016_RICS_UK_Residential_Market_Survey_ri.pdf

Sales in London are down 55% and the 3month moving average is the same, so prices have been falling at 55% for at least 3 months. New instructions down 60%. This is BEFORE Brixit.

In SW11 sales in May 2015 were ~100 (yearly total 1300). In May 2016, sales of 22. Looking at the numbers I'd guess London has been in a crash since late 2015.

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Peter, that's interesting. I would love to know how much Rics are advising on reductions. Do they release any standalone figures or are they just merged into the monthly predictions?

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Peter, that's interesting. I would love to know how much Rics are advising on reductions. Do they release any standalone figures or are they just merged into the monthly predictions?

I don't think it works like that. RICS don't issue that kind of party line to their members, who use their own judgement when conducting valuations. But the RICS report helps inform that judgement by providing an overview of the market.

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They didn't give a figure, becuase the surveyors know their markets better and its very variable across the country. They advised caution. Look at that report and you (and surveyors) can come to their own conclusion.

I'd estimate 10-15% down in London from Dec 2015 til Dec 2016, my guess. In contrast Wales is looking at price rises.

London has a real problem with (potentially) dissappearing jobs and people.

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