Tuesday, 13 January 2009

House sales - the lowest for thirty years

Where did that buoyant UK housing market go? Where are all those sharp suited estate agents with their cheap sales pitches? Don't you just miss the UK housing bubble?

Now it is all doom and gloom.

The housing market slowed to a virtual halt at the end of last year as the number of properties sold reached a record low, the Royal Institution of Chartered Surveyors (RICS) said. It blamed the lack of mortgage finance for the lowest transaction levels in 30 years.

Surveyors reported that potential buyers, including first-timers, had been unable to take advantage of falling house prices because lenders would not grant home loans at affordable interest rates to any but the most cash-rich investors.


(from the Times)

6 comments:

Anonymous said...

Where was it originally? Only a dream.

electro-kevin said...

http://uk.news.yahoo.com/21/20090113/tuk-record-fall-in-property-prices-6323e80.html

Why the enormous disparity in house price falls depending on source ?

aSteve said...

Was 1978 an especially slow year for UK house sales?

Ajay said...

Deflation is a risk for landlords who have large debts. Rent falls and mortgages grow in real terms.
Is it a real threat in the short term? Yes. The very short term. I reckon we will have 2 quarters of deflation max and we probably will not notice them. The good thing is deflation means the government needs to print money!

Now they do not actually print money, they just add another ledger at the Bank of England, credit it with a figure they like (I wish I could do this myself!) and then get buying.

The bank will buy mortgage debts owned by the bank and then the theory is the banks will lend this new money. Can I see them lending out this money? Not sure.

But if they do we will see inflation come back and if they get it right we should all go back to normal conditions and we will look back at the last 12 months and go: "WHAT WAS THAT YEAR ALL ABOUT THEN!"

If they get it wrong then the 2nd half of 2009 is going to be tough. I cannot see it getting worse than what we are currently going through but normality will not be restored.

I feel they will get it right. We are in a time where relying on your gut instinct is really only the reliable tools we have. And I think we will come through this.

So what does this mean for property investors. All the professional property investors know what time this is - buying time! I just hope there is enough stock of properties coming on to the market.

Speak soon.



Ajay

Nick von Mises said...

FTBs are unable to take advantage of falling prices, and thus are forced to wait until they fall even further.

Terrible.

mike said...

Only 4 properties sold in the whole of November in my area according to home.co.uk. How can this support the 20+ estate agents! I think those in denial have now lost out big time. It's interesting that semi's are still on the market for 200K+, yet the average sell price is around 130K. Basically you can ignore the price shown by estate agents. There's up to 70K difference on the sold price.