Words: Ashley Rigg
Published: 16th May 2011
*UK property market close to perfect storm
The news from Rightmove this morning is that UK asking prices have hit their highest level for nearly three years. This is despite
numerous reports of falling sale prices and the unsold property stock levels approaching all-time highs.
Asking prices are up 1.7% on March and are now only marginally (1.5% or £3,626) below their all-time high recorded at their peak in May 2008.
Despite the confidence of sellers, Rightmove commercial director, Miles Shipside predicts falling buyer numbers and record stock levels.
“Estate agents usually see their stock turn over more quickly during the spring, but this year’s slower market suggests that stock levels may exceed Rightmove’s previous record of 79 properties per branch over the next few months,” he says.
Comment: Perfect storm for UK property agents
The property business is all about transaction volumes. There are a number of factors that can inhibit sales. As far as the UK property market is concerned it would be easy to put a tick against almost all of them.
-
Unrealistic sellers
-
Low and decreasing number of buyers
-
Falling prices
-
Imperfect information (about what properties are worth)
-
Political & economic uncertainty
-
Tight mortgage market
-
Price to income levels close to all time highs
-
Price to rental ratios close to all time peak
The UK is of course not one market. Prime locations, (notably London and some parts of South East England) are bucking the trend of falling prices. However on average the UK ticks all the boxes above with the exception of “imperfect information”.
UK sellers have access to relatively accurate pricing data but are for now choosing to ignore the facts.
Contrast this with Spain which arguably has all the elements for a perfect storm of bad news for agents due to opaque price reporting.
For those agents in both countries not selling in prime locations, the commercial outlook looks uncertain for the forseeable future.
Source: Global edge
User Comments
Well. That can be turning point in property market growth. Given figures clearly shows its progress.
Property Finders London,
http://www.homes-one.com/