Thursday, June 18, 2009
UK “AAA” rating under threat but optimism about house prices is what really matters
Four buyers for every house for sale
Four house hunters were chasing every property for sale during May as potential buyers are feeling increasingly optimistic about house prices this time next year. But total mortgage lending fell again. A survey by the National Associations of Estate Agents showed that estate agents had an average of 299 house hunters registered with them during May, the highest level since September 2007 when the market downturn began. They sold an average of 10.4 homes each, the highest level since October 2007 and the fifth consecutive monthly rise.
Posted by jack c @ 12:43 PM (5358 views)
30 thoughts on “UK “AAA” rating under threat but optimism about house prices is what really matters”
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paul says:
Quoting each others’ press releases now.
The ‘four buyers for each house’ is almost certainly on statistically shaky ground too. It assumes that each person is only looking at one house when they’re clearly not – they are interested in a number of houses and each potential buyer has varying levels of interest.
The other statistic they quote – the Building Societies Association yesterday that said 59% of people they surveyed think now is a good time to buy property is just guff. They didn’t ask me. Oh, but they only ask people going into the building society to ask about mortgages.
Like asking people in the waiting area at a hairdressers if they are interested in having their hair cut! The fact that only 31% said “No” should actually be worrying.
uncle tom says:
There’s a lot of contrived number-crunching going on.
How many of these ‘sold’ houses are are sold STC?
In Cambridge CB1 area, there are currently more properties sold STC than there are houses otherwise on the market. People are offering to buy houses – subject to them being able to sell their own for more than it’s worth. Chains are being formed, but lack one essential detail – the guy coming in at the bottom.
As we’ve seen from various surveys, people don’t believe that house prices have stopped falling, and until they do; there may be plenty of people who want to move (and certainly downsize) but very few wanting to enter the market.
As we move into the autumn, the optimists who think they are somehow immune from the reality of the market, are going to get a very nasty shock..
hpwatcher says:
the optimists who think they are somehow immune from the reality of the market, are going to get a very nasty shock..
Lets hope so……
jack c says:
Here is the Headline and Report from today’s mortgagestrategy publication (The last paragraph leaves me in despair)
Demand outstripping supply, reveals NAEA
Natalie Martin
18-Jun-2009
Figures from the National Association of Estate Agents show demand is outstripping supply across the UK housing market, with estate agents registering four house hunters to every available property.
It has found that the average branch had 299 house hunters on its books in May – up from 265 the previous month and 247 in May 2008, but the average branch had only 69 properties on its books.
For the second month running estate agents also reported a successful selling period. The average branch sold 10 properties, a 30% increase on the same time last year and double that sold on average in August 2008.
Gary Smith, president of the NAEA, says: “This is really good news for the housing market and the UK economy in general.
“NAEA members are showing that there are buyers aplenty out there. More often than not these are also potential sellers who are at the beginning of the process – so there is bound to be a lag which creates a shortage of properties in the short term.
“With mortgage interest rates at historically low levels and prices now far more realistic than in previous years, home ownership in the UK seems to be set to lead the way out of the recession.â€
sybil13 says:
The NAEA have said that most of the prospective buyers haven’t even put their properties on the market yet. I assume prospective buyers do not want to pay for HIPS and estate agents fees unless they find a property they want, but would YOU accept an offer from someone who hasn’t even marketed their property yet? People truly have no idea what the market is doing, they read a headline
sybil13 says:
The NAEA have said that most of the prospective buyers haven’t even put their properties on the market yet. I assume prospective buyers do not want to pay for HIPS and estate agents fees unless they find a property they want, but would YOU accept an offer from someone who hasn’t even marketed their property yet? People truly have no idea what the market is doing, they read a headline NOW IS A GOOD TIME TO BUY, and think the mortgage market is like 2007! They fail to realise there are 97% fewer mortgage for FTB’s, that lenders are reluctant to lend more than about 70% and even then valuations on properties are coming back 30% + under peak. Last year property prices went down down down, yet today the CML May mortgage lending figures are down 58% yoy! Says it all really. Anyone who had hoped to get close on 2007 value for their property I feel has missed their chance. They needed to put the property on in March 2009 with July historically being the busiest month for house moving. With an average tom of 20 weeks anyone putting their property on now will be lucky if they get just 30% off peak by the autumn!
contrails are not a conspiracy (formerly npnh) says:
In other news:
Turkeys vote against Christmas.
george monsoon says:
I have to agree with uncle tom’s statement..
People are offering to buy houses – subject to them being able to sell their own for more than it’s worth. Chains are being formed, but lack one essential detail – the guy coming in at the bottom.
Myself being the guy at the bottom, with no chance of saving 20k and no real hope or desire to stuff my life full of this level of debt.
happy mondays says:
@ George, you need to get a life mate, Become a wage slave, a part of the system, which you never know after 25yrs of paying off an overpriced badly constructed action figure sized house, you will be able to sell it, to pay for your keep in a retirement home..If your lucky..Alternatively don’t play the game..
japanese uncle says:
Personally UK rating should be Abb or something. Anyway if or rather when the rating is reduced, some exodus from the GBP seems inevitable.
growler says:
@ sybil13: Indeed. totally agree
NAEA act in the interests of their members – and it’s in the interests of their members that supply is short since this will help what little business there is.
The NAEA must know that volume of property on the market is compelled to rise. This will coincide with increasing mortgage rates (as we’re seeing), decreasing average mortgage LTVs and decreasing average mortgage value (as we’re seeing) increasing unemployment (as we’re seeing) and the need for drastic cuts (that the adults have confessed need to come). Even the NAEA know that this will not bode well for their members – so the message is “make hay whilst the sun shines”.
Can’t blame them! But it’s glaringly obvious
uncle tom says:
I think Sybil is right about HIPS
Also, people love window shopping for property. Think about it – four times as many buyers as sellers means that there is either a massive invasion of FTB’s (not, I think..) or three out of four buyers are not serious..
growler says:
Uncle Tom: I remember the CML saying it was not the FTBs that caused the recent “increase” – the same increase that was actually a 58% decrease versus historic as Sybril says.
So it is window-shoppers. People like me as I’ve registered with agents purely to see what’s about so that I can “do better homework” for the day that we do decide to offer. They agents don’t know that I’d be offering VERY low – all they’ll report is the increase in enquiries.
And I agree with you – we can’t be the only ones lurking
happy mondays says:
I think it’s more to do with the heat, lot’s of people with sunstroke, looking for an oasis.. Then you have the friendly ea’s smiling out of the window at you, offering shelter a cool drink and a nice chat..
51ck-6-51x says:
Too right paul
– Wow, an even more inaccurate headline than the article posted earlier.
n( registrations ) != n( buyers )
n( registrations ) != n( potentialBuyers )
Sybil – you have a point. I also think FTBs are registering in order to receive the new-to-market notification services too; then they can look out for that ideal property and stick in a cheeky offer.
peter_2008 says:
Desperate positive spins.
Ok so, for every 69 properties there are 270 REGISTERED people (not buyers).
But, wait a minute; this is not news, because there has NEVER been any period in the last 300 years that the registered number was lower than the number of properties. This is like trying to estimate the UK population by working out the number of Roasted Chicken being sold in TESCO and conclude the UK has a population of 1 billion!!!
The conversation must went like this:
“Oi Kirstie, we are running out of spins. Think about something and quick!â€
“How about telling people that there are more humans than houses on the earth.â€
“Yea, I like that stating the obvious approach, but do you think people will believe this shxt?â€
“Well, all news paper editors are BTLs. They can’t wait to publish this shxt.â€
“That sounds like enough good shxt to me.â€
“Ok, I will send a press release to all those shxtbags in Times, BBC and Expressâ€
“That’s my type of girl!!â€
bluebeach says:
I’m glad |I’m back, you chaps give me a great smile as I leave the office…. keep up the good chat (_8(|)
jack c says:
More of the same from today’s report in the FT – Gemma Westacott Thursday June 18, 2009 “Property demand now outstripping supply: NAEA”
Full story http://www.ftadviser.com/FTAdviser/Mortgages/News/article/20090618/57622e74-5be5-11de-b28e-0015171400aa/Property-demand-now-outstripping-supply-NAEA.jsp
Jms452 says:
In our area they are more than 4 estate agencies operating. If you are keen to buy a house you register your interest with all of them and our counted 4 times.
Most people selling a house only register with a single agency and so are only counted once.
i.e. you would expect there to be about 4 times as many interested ‘buyers’ than sellers.
You can only hope that those with enough deposit to buy a house also have enough nouce to take any ‘survey by the National Associations of Estate Agents’ with a pinch of salt.
vindicated says:
These 4 buyers that are ‘chasing’ every property can’t be running very fast… not round our way certainly. There’s a house on our road which has been on the market for over 2 years. I’m amazed that those 4 buyers have not caught up with it yet because from what I can tell, its not going anywhere………..
nomad says:
Crikey! Is that Homer Simpson @ 17. (_8(|)
paul says:
(_8(P)“
donuts …
hpwatcher says:
it’s all about percentions, and of course, a huge amount of QE.
Once this phase is over, we will soon be back to interest rate rises, massive cuts and falling house prices.
Europeanbear says:
I am sure many of the 4 registered buyers are registered with multiple agents and thus will be double, triple, quadruple or more counted. On the other hand most properties will be sole agency sales and only be counted once. You can have x 5 times the properties as buyers in town x, but if there are 10 agents in town x and all prospective buyers in town x are registered with each agent then low and behold you have two buyers for every property…
tenyearstogetmymoneyback says:
The fundamental issue is the availability of mortgages.
I have been in the position (in 1995) of having “sold” my house (at a 20%) loss
only to be told by the “buyer” after about 6 weeks that she couldn’t get a big enough mortgage
and would need another 8% taking off the price. I said no and still wonder if I made the right decision.
The ultimate insult was having to pay to get the deeds transferred back from my Solicitor to the Building Society.
Thinking about it there is a perfectly good explanation for this. All the existing home “owners”
could just keep selling the houses to each other until all their savings have gone in estate agents fees
and stamp duty. That way the Government and Estate Agents get exactly what they want without having
to cater for First Time buyers 🙂
:- Duncan
Bought 1989 £60500 Sold 1999 £70500
estate
tenyearstogetmymoneyback says:
Should have proof read the last post. The sig should read Bought1989 £65500.
A £10000 profit in 10 years would have been very nice.
Paul Smith says:
Reprocessions are on the increase but the sold prices of these houses are not recorded by the land registary data base.
If they were it would make the percentage increases disappear.
All houses sold should have there prices paid recorded, but that would stop the profit making.
Polyester Eyed Joe says:
honestly. a retraction should be made about this four to one quote. how idiotic. they have really stooped to a new low in absolute mindless idiocy.
example:
i am registered with 7 estate agents.
lets assume my town has 10 estate agents. thats 299* 10 = 2990 registered people
but lets say on average, like me, they are registed with 7 estate agents each
then the actual number of people looking for property = 2990/7 = 427
those 10 estate agents have on average 10 * 69 houses =690 houses
so thats actually 0.62 houses per person not effing 4
this data is obviously dependant on the average number of estate agents people are registered with but you can see my point
no wonder the country and the house prices are in the mess they are in when these moronic idiots cant do simple maths
we dont need a hpc, we need a cull!
Ian C says:
Hi
I have been reviewing these blogs for 2 years and this is my first post.
Firstly – great site!
Secondly – this article boiled my blood. Damn NAEA and all their members. After the tiny spring bounce, activity has probably dropped off, so what do that do, come out with there all tricks / mind games to talk up the market. Idiots! I hate them!
Rant over!
Ian C
51ck-6-51x says:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=113649