According to Rightmove, sellers are holding out; asking prices are increasing. Here are the bullet points from their press release:
• New sellers raise average asking prices by 1.8% (£3,996), the largest rise for 14 months.
• 3rd consecutive monthly increase may be more than a seasonal bounce, though many new sellers are still starting too high, with circa 80,000 current sellers lowering asking prices by 2% or more each month.
• 22,000 new sellers per week tempted to market, up 13% on previous month — a signal of growing confidence that it’s a good time to trade up and there are deals to be done.
• Any early signs of recovery must be put into the context of mortgage approvals running at a mere third of recent levels
Asking prices are not sales prices.
9 comments:
Rightmove nonsense - No.343,434,199
A thin market could be distorted by a few sellers with larger properties coming onto the market. Nothing has changed in the economy to support higher prices.
22,000 per week coming on to the market? About 90,000 a month? According to the Land Registry monthly sales are around 38,000.
The crash goes on then.
The market is becoming flooded with people desperate to sell to get out of the mess rather than spend the next 30 years paying off a huge mortgage. This means only one thing and that's falling house prices for quite a long time to come.
"Rightmove detects Spring bounce"is about on a par with:
"grizzly bear poohs in woods"quelle surprise!
Look at the stats they use as evidence - what a way to muddle correlation and causation.
The laws of nature are forcing the British public (amongst others) to let go of their property fixation - and it isn't a pretty process to watch.
Unfortunately, experience shows that every time people have to let go their property-as-investment fixation, it comes back again bigger and better than ever after a decent interval of a few years.
What's needed is a major overhaul of taxation of the use of property "profits" and I still stand by the suggestion (are you listening, Darling?) of CGT levied at 40% on equity withdrawn from property. As a quick and dirty solution it'd make people think twice, make property more like any other asset class instead of something special, and eventually persuade people there's no such thing as "money for nothing".
Unless you're on certain benefits, of course, but that's a different topic.
PS - and while you're about it, Darling, how about removing tax relief at higher rates from pensions contributions and start to get some sanity in there, too.
Sounds like it could be a little premature, but fingers crossed. I would say most people who currently market houses are in a very desperate situation - and until banks begin lending sufficient (but not ridiculous) mortgages again, the crash will continue.
FormerTory,
An LVT is a much more sensible tax than what you suggest and could be used to displace harmful taxes such as those on incomes.
@AC1: Yes, I recognise that completely, but it amounts to a major overhaul of the taxation system. One which I'm much in favour of.
My suggestion - a quick and dirty solution, as described - would be an interim measure capable of overnight introduction, easy checking and easy collection.
And it'd make some of the stupid people think twice. The weakness is that it might encourage people to overborrow on unsecured facilities but they do that anyway. At least when they do they're paying an interest rate which better reflects the risk.
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