Supply And Demand

[bndh]

Interestingly I saw that only 35,417 mortagages were approved last month. According to Rightmove 200,000 properties are put up for sale each month. I know that some buyers are paying cash. For arguments sake say there were 35,500 cash buyers last month. This means that only 70,915 properties are sold each month. So basically 65 % of all properties that go on the market are not being sold. As the months go on the percentage of unsold properties will increase (65% of this months + 65% of next months sales).

Are there any figures that says how many properties are put up for sale against those that are sold?

With so many properties not being sold how far will prices drop?

[The Ayatollah Buggeri]

What's your definition of 'not sold'? Ones which are actually taken off the market without a completion, ones which are still on the market but unsold after a specified time period?

We're in the Mexican standoff period at the moment. The vast majority of those who have their properties on the market don't need to sell them: that will only happen in the event of a sharp upturn in unemployment, or if the strain of rising living costs forces owners to run totally out of money. The former hasn't happened, and the latter doesn't happen overnight. The plunge in new mortgage approvals and the increased rates on those which do go through are ominous signs that the screws are tightening. But it'll take time.

Anecdotal, but I would argue indicative: new colleague joined us in February, can't sell house and so is commuting from Newcastle to Leeds daily. She'd rather do that than drop her asking price. It's silly: I dread to think how much her monthly season ticket is costing her (from York it's £150 and Newcastle is three times the distance), and shelling out that much while chasing the market down doesn't exactly strike me as a cunning plan, not to mention wasting 20-25 hours a week on trains.

[DataMonkey]

Interesting stuff. Whenever there are housing stats published in the states, they usually have something along the lines of 'There are currently x houses on the market, which equates to y months of supply'. It's a shame we don't have anything like that over here!

Anecdotally, I've been keeping a regular PropertyBee eye on the number of properties for sale in Nottingham. I find this interesting as it's where I live, but I hope it might be interesting for others because Nottingham seems to be the furthest forward in the cycle. A poster on here (Kagiso IIRC) showed that, in real terms, Nottingham never recovered from the 2005 slowdown, and the LR index shows YoY negative for the last 2 months (currently -2.3%). The interesting thing is that the last week or so has seen a deluge of properties come onto the market, and also some pretty deep price cuts. As an indication, I've had PropertyBee for almost exactly 4 months, and when I started looking there were under 1500 properties sub £100k. This has wobbled around for most of the spring, breaching 1500 for the first time about 2 weeks ago. I checked today and there are now 1580! It would be interesting to see whether other areas follow this pattern i.e. serious shifts about 2 months after YoY -ve.

I suspect some areas will be affected worse than others by where they lie in relation to the stamp duty thresholds: round here a decent 3 bed in an area you'd be prepared to live in peaked at about £135k, and almost all are now currently being squeezed in at £125.