|
|
| MONDAY 21ST FEBUARY 2005 |
 UK
SELLERS FEELING LITTLE MARKET PRESSURE
Asking prices for UK homes have risen sharply in recent weeks,
sparking fears that sellers and estate agents have not been
willing or able to shake off the 'spring boom' mentality.
Typically estate agents and sellers increase prices at
this time of year but this is not a typical year said Miles
Shipside, commercial director of Rightmove.
A buoyant economy and stable interest rates mean there
is little urgency for homeowners to sell, said Rightmove
today. As a result, the average number of properties on
estate agents books remains historically high at 63 - against
48 at the same time last year - with the average home staying
on the market for 85 days.
Without forced sellers, long-term stagnation, rather than
falling prices, may set in said the firm.
Asking prices rose sharply over the past 5 weeks, by £4,321
or 2.3%, from £189,509 to £193,830, Rightmove
said. This reverses the downward trend of the previous
3 months, during which prices declined by 2.1% or just
over £4,000.
After 2 months of low activity in terms of new instructions,
the number of properties coming on to the market has surged
over the last month, as a huge 132,000 homes were listed
by estate agents who advertise on Rightmove.co.uk. This
represents over half of all property on the market, by
far the largest sample of any house prices indicator, providing
an up to date trend of market behaviour.
The traditional New Year pick up combined with some pent
up buyer demand has increased sales of properties from
the very low volumes experienced since last summer. Time
on market has declined very slightly, from 87 to 85 days,
but remains much longer than it was in the summer, when
properties were coming off the market in just 53 days.
Similarly, the average number of properties per branch
remains historically high, at 63 – down from over
67 in October, but still much higher (+31%) than the level
of around 48 this time last year.
Not a typical year
In a typical year, estate agents compete with each other
to build their stocks of properties for sale in January
and February, in preparation for the customary spring pick-up
in activity.
This competition results in some optimistic asking prices
and when combined with renewed buyer interest, affordability
and limited supply, results in a rising market.
A look back over the last few years suggests that as the
housing market picks up from its festive slowdown, asking
prices always tend to rise in February. In 2004 they rose
by 2.1%, while February in the previous 2 years saw increases
of 2.0% and 4.5%.
Miles Shipside, commercial director of Rightmove said: "Asking
prices have risen this month, as is typical of the last
few years, but it’s not a typical year that sellers
and their estate agents have become accustomed to."
"Activity levels have been really low since summer
last year. Just look at the recent Land Registry figures,
which measure all transactions in the market. They showed
a 24% decline in actual transactions completed in the last
quarter of 2004 as compared with one year earlier, and
the lowest for 6 years, since 1998."
"In addition prices fell by over £5,000 or
2.7% as compared with the previous quarter, a bigger decrease
than had been measured by all other price achieved indicators."
"There is evidence of pent up demand for housing,
with continued growth in the number of people looking at
property for sale on the internet and record levels of
site visits on Rightmove.co.uk. Most agents report a clear
pick-up in enquiries and viewing levels by prospective
buyers. On top of this, if properties are realistically
priced and well presented, they are selling, with buyers
encouraged by the relatively low cost of borrowing and
confidence that there will be no crash."
|
|
|
