Jump to content
House Price Crash Forum
Sign in to follow this  
grey shark

House-buyer Numbers Drop To Record Low....

Recommended Posts

House-buyer numbers drop to record low

By Jennifer Hill Reuters - Tuesday, March 25 12:02 amLONDON (Reuters) -

The global credit crunch is hitting the housing market, pushing house-buyer numbers to a record low, figures showed on Tuesday.

The number of house-buyers on estate agents' books dropped 12 percent last month -- to 243 per agent from 276 in January -- according to the National Association of Estate Agents (NAEA).

That was the lowest recorded in its monthly housing market survey to date.

At the same time the gap between asking prices and what properties actually sold for continued to widen to stand at 4.5 percent.

The NAEA said a "plethora" of external pressures, including the credit crunch and squeeze on mortgage approvals, was making buyers wary and causing the cogs in the property market to slow.

Lenders have been reassessing risk and tightening their criteria amid turbulent market conditions that have pushed up the cost of borrowing.

"Invariably, the global credit crunch, especially the U.S. situation, has had a knock on effect, which coupled with consumer inflation, is placing continuing pressure onto the property market," said president Stewart Lilly.

"We continue to call on the Bank of England to lower interest rates to help prevent the economy slumping and to help bring back a renewed sense of optimism for the consumers."

The Monetary Policy Committee has cut the base rate twice in recent months to 5.25 percent, but some lenders have failed to pass the reductions on and fears are growing that more and more consumers will encounter serious debt problems.

The number of homes on the market during February declined almost 11 percent to an average of 74 per estate agent as potential sellers awaited more favourable market conditions.

Each agent made an average of eight sales during the month, the same as the previous month, but down from 13 a year ago.

The NAEA survey came a day after the country's largest property portal Rightmove.co.uk said sellers need a "reality check" when pricing their homes for sale, as unsold stock reaches record proportions.

The Web site -- which advertises 90 percent of all homes for sale via estate agents across the UK, measuring an average 35,000 properties coming to the market per week -- said the property market was in danger of stagnating, as house price growth nears zero percent.

:D

Share this post


Link to post
Share on other sites

here's the full NAEA press release:

First time buyers dip as buyers' housing market takes hold - NAEA

Members of the National Association of Estate Agents (NAEA) reported that at present the property market is dull as recent figures from the monthly housing market indicate that the plethora of external pressures exerted onto the market is causing buyers to be prudent...

Members reported that the number of house buyers on books, houses available and percentage of first time buyers decreased throughout February. Whilst, the number of sales achieved remained static with last year, the average difference between asking and sales price continued to widen.

NAEA President, Stewart Lilly comments:

"The figures reported in February echo the current climate of confusion that is clouding the property market at present. Invariably, the global credit crunch, especially the US situation, has had a knock on effect, which coupled with consumer inflation, is placing continuing pressure onto the property market. However, we still have a long way to go before we see the difficulties of the late 1980's repeating themselves!

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Share this post


Link to post
Share on other sites

The numbers won't even include the latest round of mortgage tightening where terms have been dramatically cut back.

With mortgage offers already made it will still take a few months for these hapless tail-enders to ripple through the system (unless they think twice about buying).

So, June, July to see full impact on buyer numbers?

Share this post


Link to post
Share on other sites

"The Web site -- which advertises 90 percent of all homes for sale via estate agents across the UK, measuring an average 35,000 properties coming to the market per week -- said the property market was in danger of stagnating, as house price growth nears zero percent."

No one seriously expects house prices to increase, but the next few months will be critical in determining if prices actually fall or if they just stagnate for the next few years.

As an STR'r I'm hoping for significant nominal falls, but as of today there's little evidence for that apart from newbuild apartments in provincial cities. Unfortunately there's still a possibility that the price correction could be mainly delivered through inflationary erosion of real prices. I'm hoping that the "Spring Bounce" will fail, interest rates will hold, and the growing overhang of unsold property will start to grind down asking prices. That's the positive scenario, but the news that asking prices actually increased last month shows that there's still some way to go before sellers feel they have no other option but to cut prices.

Share this post


Link to post
Share on other sites

You may absolutely rest assured that if EAs are saying publicly that the market is 'quiet', 'difficult' and 'challenging' - then, in fact, the market is absolutely stuffed and a lot of them are facing bankruptcy.

Interesting figure in there. It says 'each agent is selling an average of 8 properties a month'. This is meaningless of course. An agent might have 5 branches or 1 branch. If an agent has more than 2 branches, selling 8 properties a month will soon lead to bankruptcy.

Hamptons moved into my local town last year. They are up against 4 big local independents that have the market sewn up around here. Looking at the number of properties on their books, I would be surprised to see them still in town next year.

My point being that EAs are eternally optimistic and stupid. Even Hamptons who are pretty successful thought that last year was the right time to open a new branch in a town already heavily over subscribed with agents. They even occupied premises vacated by Roger Platt, another agent that could not cut it. Pillocks the lot of them.

Share this post


Link to post
Share on other sites
As an STR'r I'm hoping for significant nominal falls, but as of today there's little evidence for that apart from newbuild apartments in provincial cities. Unfortunately there's still a possibility that the price correction could be mainly delivered through inflationary erosion of real prices. I'm hoping that the "Spring Bounce" will fail, interest rates will hold, and the growing overhang of unsold property will start to grind down asking prices. That's the positive scenario, but the news that asking prices actually increased last month shows that there's still some way to go before sellers feel they have no other option but to cut prices.

But who said asking prices went up and what is their motive? Their motive is to start getting vendors to drop prices. I don't believe a word any VI says. I just look at my local market and keep in contact with a few local EAs on the basis that I might buy if the right property comes up.

I've had an agent beg me to view a property and make a silly offer - just to start price conditioning the vendor.

I keep seeing properties go under offer and then a few weeks later the sign changes back to For Sale. I keep seeing local properties dropping - admittedly by only 10k but, after a few months, asking prices are lowered by a total of 25k from when the property first went on. Where is this reflected in Rightmove's figures? I would suggest that where I live NOTHING is selling at asking price. Where is this reflected in VI figures? From the peaks that the sort of property I am looking at reached about a year ago, I would say that properties that are actually selling are now going for about 10% less than they would a year ago. I am not saying nothing is selling - it is. But only after a long time on the market and one or more price reductions.

Share this post


Link to post
Share on other sites

General Melchett and Nicolaj hit the nail on the head .

Anything , anything at all ,is worth what someone is prepared to pay . In the case of houses , it is whatever the buyer is prepared to pay ,based upon what finances he/she/they can raise . If I have a house , that some clip board wielding estate agent says is worth £200,000 , and a buyer is prepared to , or can only raise £150000 to but I have 3 basic choices . I can sell at a reduced price , wait for a higher offer , or withdraw from the "market" . If I can't get a higher offer , then my choice is down to 2 options : Take it ,or leave it !!!

This is simple stuff ,why can't some people realise it ????

Share this post


Link to post
Share on other sites
Where is this reflected in Rightmove's figures?

It isn't, the Right Move figures are calculated from the original price a property is set at when placed on the market.

Reductions to initial asking price are not picked up in the index.

Quite easily manipulated, so hard to see why they retain any credibility.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.