Sellers and buyers stay away from 'uncertain' property market

Monday 30th January 2012

Sellers and buyers are staying away from the market, the Hometrack report revealed this morning, as sales fall away.

The number of new applicants has fallen 10.5% in the last month, after a 6.3% fall in December and a 2.2% drop in November.

The speed at which property listings are dropping has also accelerated. This month, there was a 5.4% drop, following falls of 3.4% in December and 0.8% in November.

This month, there was also a 14.3% fall in sales agreed, following falls of 0.9% in December and 4.6% in November.

There was not a single region in January where the number of sales agreed did not fall. Sales in East Anglia held up best, with a drop of 6.3%, but fell hardest in the North-East (down 23.1%) and the South-West (down 19.2%).

Hometrack said the underlying trend is one of tightening supply and weakening demand.

Between August and January, the number of buyers registering with agents declined by 23%. Meanwhile, the supply of homes for sale has contracted by 7% over the last six months – and supply has not contracted to this extent since 2009, said Hometrack.

It also reports no change in house prices, although a rise in London prices has offset small falls across the rest of the country.

As has become usual, London’s housing market distorts the overall picture. Average time on the market is 10.2 weeks, but this is helped by London’s time on the market of 6.5 weeks. In the South, the average time on the market is 9.1 weeks – the highest for nearly three years. In the North and Midlands, time on the market is just under three months, at 11.9 weeks.

Hometrack’s director of research, Richard Donnell, said: “The latest survey reveals a market dogged by uncertainty.

“On a national basis, house prices have not increased over the last 18 months (since June 2010) – a theme carried over into January when prices were unchanged. A small rise in London offset falls in other regions.

“London looks set to buck the national trend again in 2012, thanks to overseas buyers providing a boost to prices in London’s prime areas. Elsewhere, demand remains constrained by the uncertain economic outlook.

“Some agents have also reported an increase in down-valuations as surveyors exercise growing caution.”

The Hometrack survey questioned 1,500 agents.

Separately, a Rightmove survey, also out today, shows that 60% of home movers believe it is a buyers’ market. Only in London does the percentage of people who believe it is a buyers’ market slip below 50% (to 47.1%).

Surprisingly, perhaps, 66% of the 32,111 people questioned think house prices will stay the same or go up this year – a higher percentage than those asked the same question a year ago.