Thursday, January 3, 2008

Sales volumes crash by up to 39% in 2007 – Land Reg latest figures

UK house prices increase by 0.6% as house sales crash

In theory this data relates to house sales transactions that could have taken place August 2007 onwards. What is alarming is the drop off in sales volumes for the same period vis a vis 2006. The house price sectors the majority of Britons operate in saw a dramatic contraction in transactions. In the lower priced band of up to 150K, (the first time buyer market), sales volumes were a staggering 39% down in direct comparison with 2006. Once again this should be viewed as not including the impact of the credit crunch, causing 44% less mortgages for house purchase apprrovals as acknowledged by the BBA and CML.

Posted by converted lurker @ 11:32 AM (1277 views)
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17 thoughts on “Sales volumes crash by up to 39% in 2007 – Land Reg latest figures

  • Sorry I re-post a previous comment.

    From previous land registry reports, the year on year changes in volume of transactions show the extent of the market collapse. Yoy change in number of sold properties (England and Wales):

    +3% — Jan 2007 versus Jan 2006
    -2%
    4%
    -2%
    -10% — May, US house prices start to fall
    -11%
    -9%
    -15% — August 2007 vs aug 2006, credit crunch
    -12%
    -10%
    -26% — Nov 2007 versus Nov 2006 ====== MINUS TWENTYSIX PERCENT… WOW!!

    and look at the trend, very consistent, a landslide!! basically it is just BTLetters left to buy anything.
    mortgages dried up, chains have collapsed. job security gone, no one wants to “upgrade”. FTBs have emigrated.
    whoever thinks there are score of buyers ready to jump in and revert this downward trend is up for a rude awakening

    prices will keep high for a while and eventually come down, that;s gravity law

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  • Just wait until the figures in April 2008 are published – even the most optimistic VI won’t be able to deny the slide in property transactions and prices.

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  • So if sales volumes are down that much, then surely at least part of that must be due to flats not selling, yet the sellers insisting on keping an unrealistic price. At the moment there is still a fair bit of denial about a crash being under way.

    “Ahh but prices havent fallen in Scotland…” I am told,
    yet the flat above me has been on the market for ages, probably before the NR stuff hit. The price isn’t unrealistic (by pre NR standards), but the fact there are no buyers would suggest we have actually crashed here, there is just a lag in the figures to show it.

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  • converted lurker says:

    TBH Jack I reckon the sales volumes for then will be the time to take cover, it’ll be like a winter nuclear holocaust. Mortgage approvals for house purchase in Nov/Dec were down 50%, logically house sales will follow a similar pattern; notwithstanding the cash rich oligarchs who will prop up ther market and the Daily Express headlines ;¬)

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  • @converted – thats my thinking, there is an approximate 3 month time lag in relation to mortgage approval and the actual sale going through – throw in the proposed changes to CGT (Capital gains Tax) and the market and the usual stats will be showing a very different pattern/trend to the previous upward spiral that we’ve seen year on year.

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  • 39% drop in volumes isn’t a ‘soft landing’ is it?

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  • I seem to remember the same thing in 2005 – transaction volumes dropped dramatically, and we were all set for a crash until the BoE cut rates in August 2005. That’s why the period from mid 2005 to mid 2007 was the Dead Cat Bounce, or the Suckers’ Rally if you prefer.

    Transaction volumes are an important indicator. The sudden fall can be due to either a lack of buyers or a lack of sellers. The VIs will claim that HIPs have deterred sellers; the HPC crowd will claim that buyers are holding back and waiting to see what happens. A better indicator would be the number of unsold properties on estate agents’ books.

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  • Falling off a cliff! Its true, enter any postcode into the houseladder website (you have to register email to access), month on month sale NUMBERS have fallen 80-90% since August.
    Some high value houses are turning over in some areas but overall volumes are now almost static. Previously 50-100 houses a month now single digits, worse than the national press is admitting.
    Its flap your wings time before the fall.

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  • @ drewster. It is a lack of buyers for sure. I am on Rightmove and Primelocation lookign for houses. I’ve never had so many houses advised as “new to market” as I’ve received in the last 3 months. I live in the M40/M25 area. I’ve been watchign the market for a year – and have seen houses come down and remain unsold. Where I used to get 2 pages of houses in my “search” I now get 4 pages.

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  • “In the lower priced band of up to 150K, (the first time buyer market), sales volumes were a staggering 39% down in direct comparison with 2006”

    Does that take into account the fact that many house that were in that band in 2006 had increased in price and so were no longer in that band in 2007? i.e. There were a lot less houses under 150k in 2007 than there were in 2006 and so thats obviously going to affect the sales volume.

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  • @ drewster and growler

    for reliable statistics on the stock of unsold properties (and unrented properties) in the EA books… look no further than the primelocation reports

    http://www.primelocation.com/house-price-index/

    click on the November release…

    I cant wait to read the December report

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  • @ ben

    indeed you are right, that is why we should focus on the headline figures only: 26% drop in sales volumes in Nov 2007 versus Nov 2006

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  • converted lurker says:

    Ben you’re right, you wouldn’t blame me for having a tabloid sensationalist moment would ‘ya? ;¬) In relation to other points I reckon the BoE would have to cut rates back down to 4.5% in order to dig the dead cat out of the garden and get it to bounce, even then prices could not rise further surely? Who is gonna give any more ‘monopoly money’ away?

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  • I’m with Converted L on this where is the Monopoly money going to come from ? Todays BOE announcement – “A BoE survey showed banks scaled back lending to households in the last three months of 2007 as money market strains persisted and expect to cut back further in 2008 — at a time when the economy is already expected to slow”.

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  • Better still. From that article another point of fact: “Once again this (the drop in transactions) should be viewed as not including the impact of the credit crunch causing 44% less mortgages for house purchase apprrovals as acknowledged by the BBA and CML”. We have some really bleak numbers coming up… shame.

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  • I think there is definitely not a lack of supply, not round here anyway. I’ve been logging the number of properties listed on Rightmove, for a fixed search area. (Rotherham, 5 mile radius). I’ve been doing this since around the start of the Northern Rock mishap. I’ve grouped the Houses for sale in price bands. 0-£100k, £100k-£200k, £200k-£300k etc.

    In summary:-

    Properties less than £100k, 41 % increase in number listed since 31/8/07
    Properties £100k – £200k, 27 % increase in number listed since 31/8/07
    Properties £200k – £300k, 16 % increase in number listed since 31/8/07
    Properties £300k – £400k, 18 % increase in number listed since 31/8/07
    Properties £400k – £500k, 23 % increase in number listed since 31/8/07

    The increasing trend would look very worrying if I was trying to sell. How can I post a graph from MS Excel ?

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  • I also posted this link separately (but forgot to enter my password so it may show up later)
    The 3rd largest UK agent slashes jobs and closes branches… that is fantastik! It claims a reduction of volumes of a third, which confirms the minus 26% reported by land reg, but actually points downward for the future… and no hopes of a recovery any time soon, otherwise You Move would not scale down operations.
    THAT S GREAT!!!!

    http://www.telegraph.co.uk/money/main.jhtml;jsessionid=3UQ5VPHKFHBVDQFIQMGCFGGAVCBQUIV0?xml=/money/2008/01/03/bcnyourmove1.xml

    Your Move owner axes jobs as housing slows
    LSL Property Services, the owner of the estate agency Your Move, has shut 12 branches and axed 315 jobs as the slowdown in the country’s housing market begins to take its toll on the industry.
    The group’s estate agency network, which is the third largest in the UK by number of branches, said volumes in the second half of 2007 fell by around a third. The group said it now plans to increase estate agent’s fees and diversify into lettings.

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