Property forecast predicts fall in sales

2011 property sales figures are said to be at its lowest level recorded in 40 years, according to Hometrack.

This month’s latest national housing survey forecasts 840,000 sales for 2011 and expects the low figures to follow on into 2012. The report illustrated a slight fall in house prices in November by 0.2 per cent in relation to the previous month, while the number of new buyers entering the market through estate agents also decreased by 2.2 per cent. The number of buyers is said to decline further in the run up to Christmas according to Hometrack.

The number of sales agreed had risen by 4.6 per cent, however the number of property listings fell by 0.8 per cent with the average amount of time on the market rising from 9.8 weeks to 9.9 weeks. This follows last weeks report from property website Rightmove which stated the asking price of homes put up on sales had fallen by 3.1 per cent in the past month. This was said to be as a result of the surrounding economic uncertainty, eroding consumer confidence with a 13 per cent fall in the number of sellers entering the market compared to October. Buyers have also been constrained in obtaining home mortgage lenders to finance property, due to increased number of restrictions faced from lenders, which has resulted the number of sales cut to less than half of that recorded before 2008.

The low sales and rising practicality on pricing among sellers to move before Christmas are supporting headline indicators of housing market activity according to Hometrack. Richard Donnell, the director of research at Hometrack said “The economic and financial backdrop to the UK housing market remains far from positive but over the last three years the sector has developed to an environment where low turnover and constrained finance have become the norm.”

32 per cent of postcodes across the UK had seen a fall in house prices, with largest falls coming from the South West, East Midlands,Wales and North West where prices dropped by over 0.3 per cent. Prices in London remained robust for the second month in a row however Hometrack believes the capital is unlikely to evade the continued pressures resulting from the financial market turmoil. It says when prices start to fall in the capital, it would in turn accelerate the rate at which headline prices dropped.

Richard Donell said “House prices have fallen consecutively over the last four months in a row there has been no significant acceleration in price falls. This is at odds with consumer confidence which over the same period, has fallen considerably.”