Drought of properties for sale turns home hunters into online junkies

Monday 16th January 2012

Estate agents’ branches are selling less than one new property a week each – the lowest level of new listings ever seen.

Just 36,433 properties are currently coming on to Rightmove per week, the lowest recorded in the ten years that the site has been measuring the market.

Rightmove’s monthly survey, out this morning, said that by contrast, there is an unprecedented level of search activity, with 44 million property searches in the first ten days of this year, up 27% on a year ago – but with home-hunters facing the smallest-ever choice of new listings.

But the listings drought does not mean prices are going up. Asking prices on Rightmove now stand at £224,060, barely changed from a year ago (up 0.4%) and down just 0.8% on last month. Furthermore, asking prices are still way above actual selling prices – currently averaging just under £160,000 according to the Land Registry.

Rightmove director Miles Shipside said that many of those searching for property on Rightmove have become ‘online junkies’, pouncing on each new property.

He said: “This search addiction is in part caused by each estate agency branch currently listing less than one new property a week, an all-time low and around half of pre-credit crunch levels.”

He said that the “low transaction volume pit” would be hard to escape from, without more mortgage funding becoming available.

Even in London, new listings are down 12% on a year ago – although London being the special case that it is, the shortage is predicted to fuel further rises in asking prices.

If London is taken out of the equation, then asking prices in the rest of the country are down 1.7% in the last year. In London, they are up 6.1%.

Shipside said that old records were being shattered by the sheer number of people searching for property. “Were a larger number of mortgages available to the market, the interest, confidence and necessity to buy would lift the current muted sales transaction numbers from the virtual subsistence level of the last three years.”

As well as less new property coming to the market, there is also less available stock already on the market, says Rightmove.

Average unsold stock per branch is 66, the lowest for nearly two years.

Shipside said that in difficult times, success in selling now required careful analysis of each micro market. A ‘wishful price punt’ would not work.

He said that in areas of over-supply of ordinary properties, sellers would have to cut prices or improve their appeal.

Shipside said: “Sellers that cannot or do not offer a special deal are likely to find their homes left on the estate agent’s shelf. There is a mass market mortgage desert, parched of funds.”

He said that in order to sell, some vendors would have to accept a financial hit that they were unwilling or unable to take unless absolutely forced to.