Henry Pryor: Blog

Friday 6th January 2012

With the results for November released by HM Land Registry, we can now begin to assess just how 2011 was for the housing market. 

Asking prices took a dramatic fall in the last two months of the year, falling 5% in the last two months – a good thing, since vendors and their agents had stubbornly refused to acknowledge that sale prices had been trending significantly lower for some time.

There was a big gap between average asking prices as reported by Rightmove and average selling prices published by the Halifax. Whilst not exactly the same data, the trends tell the important story – that those selling are still asking just about the same that they were when the market peaked in 2008, yet those actually selling are making roughly 12% less than they did in that same year.

Volumes remained thin, with half the number of homes sold in September in England and Wales compared with August 2007. November’s figure of 61,031 was admittedly a 17% rise on the same month in the previous year, but over the UK only 850,000 properties sold during the whole year – a slight fall on 2010. In 2006 and 2007, more than 1.6m were sold each year.

London has avoided the pain being experienced in many other areas of the country; for example, prices in Hartlepool are 19.8% lower than they were 12 months ago. International buyers have helped maintain prices and volumes in the capital, although the proportion of £1m homes sold in London has fallen from 67% of all £1m-plus sales in England and Wales in January two years ago to just 36% in September – which is the long-term average, as it happens.

There was no real shortage of property for sale.

The number of homes typically on the market during 2011 remained at around 879,000, much as it was the previous year, although the number was maintained by slightly slower numbers of new homes coming on to the market and fewer homes selling.

Average asking prices tumbled eventually, but still ended the year up 1% on 2010, while the Halifax and Land Registry recorded average sale prices in 2011 of 2% lower.

The chances of selling did rise last year but remained at less than 50%.

In December 2006, you had a 14% chance of selling in the first month of marketing your home. Across 2011, it had fallen to just 7%, but things improved slightly towards the end of the year.

Today you have a 9% chance of your home selling in month one, but still only about a 50:50 chance if you leave it on the market for a year.

And this year? I believe it will produce more losers than winners.

Predictions for prices vary from ‘no change’ to my own admittedly bearish minus 10%.

Importantly, the market remains hugely varied, with some areas doing much better than others. It is important to remember, though, that as with any competitive market, there must be winners and there must be losers.

Like the residents of much of Northern Ireland (down 8% over 2011 and prices half what they were in 2007) as well as Hartlepool (down 19.8%), there will be those who will suffer massive devaluation but elsewhere there will be others who actually make money in property.