Press Release: RICS housing survey paints a gloomy picture
Tue 12 Aug 2008
RICS housing survey paints a gloomy picture.
It reveals that estate agents have seen the lowest volume of housing transactions since the survey began twenty years ago. Fewer homes are changing hands even than in the dog days of the early 90s.
But, while their numbers are certainly reflective of todays market, RICS doesnt go into any qualitative detail on the picture estate agents are seeing day to day. Yes transactions are down, but there is more to a market than numbers. Crucially, there is sentiment.
And we are beginning to see a slow and wary turning of the tide of sentiment. Buyers who were looking eight or nine months ago pulled back, choosing to sit out the wave of uncertainty which had flooded the UK property market. Those buyers are now beginning to get back in the game. And thats because sellers are finally recognising that they need to be realistic in their pricing.
The drop in house prices has been short and sharp and there is now huge value to be had in this market. With so much focus on the negatives of house price falls, people are not looking at the positives if youre lucky enough to have a foot on the ladder, now is a spectacular time to trade up it. Sellers are accepting much lower offers on their properties, but when they move, theyre putting lower offers in. The discounts were seeing on larger properties are proportionally bigger, so if youre in the position to move, now is the time to do it.
The drawback is that in spite of the growing demand for houses weve seen our new buyer registrations increase in the last month or so the market is still restricted by a lack of mortgage finance. This is shutting first time buyers out in the cold most young people simply dont have cash for a deposit lying around.
With rising food and fuel costs, pressure on consumer finances is growing. Most people havent been able to afford the expensive rates on offer for the past nine months. But, there is tentative evidence that fixed rates are beginning to come down the Bank of England noted yesterday that the average fixed rate for those with a 25% deposit was down. It may not be earth shattering news but it is suggestive of a growing current of confidence for the banks. These are small steps, but they are finally steps in the right direction.