The number of house sales remains static, whilst sellers are reducing their asking prices and in many cases having to discount even further to secure a sale.
House sales still subdued
Figures released this week by HM Revenue & Customs (HMRC) show that the number of property sales year on year is still falling.
HMRC figures show that 76,000 homes were sold in October, up 1,000 on the previous month, but down 3,000 on the same time last year.
As the economy struggles, unemployment rises and mortgage criteria remains tight the figures are a clear indication that the housing market remains subdued.
Experts warn that things are unlikely to change in the short term, and could even get worse if the Eurozone crisis causes a further credit crunch reducing still further the availability of mortgage finance.
Asking prices drop by 3.1% in October
New figures from the property website Right Move show that asking prices have dropped by 3.1% in the last month alone.
The average asking price of properties is now £232,144, some £7,528 lower than September’s figure. The fall is the largest monetary fall since the credit crunch started to bite in December 2007 and the third largest fall ever.
Property experts have suggested that the deep discounting could be down to a number of factors, including the generally subdued housing market and a desire by sellers to have sold their property and moved into their new home time for Christmas.
The number of new houses coming to the market has also fallen dramatically, as the usual Christmas slowdown seems to have started early.
Reacting to the figures Miles Shipside of Right Move said: “The relentless stream of economic uncertainty around the Eurozone crisis has eroded consumer confidence to the extent that it now dominates decisions when it comes to moving home.”
He continued “A 13% fall in the number of new sellers coming to market compared with the previous month, and an 11% fall compared with November 2010, illustrate a growing reluctance to make big financial decisions.”
There continues to be a large difference between the average asking price, which has fluctuated between £220,000 and £240,000 over the past few years, and the average house sale price. Last month the Land Registry, often thought to be the most reliable housing survey, put the average selling price at £162,109. Such a wide gap has caused concerns that some sellers are putting their properties on the market at over inflated prices.
Sellers drop asking prices by £20,000
The concern over high asking prices is confirmed by new figures from Zoopla, another property website.
Zoopla’s figures show that the average asking price reduction needed to get a sale is £20,000, the largest figure for two years, rising £3,500 in the past year alone.
The figure represents an average reduction of 7.4%, up from 6.1% at the same time last year.
Even London, the UK’s most resilient property market, has seen around one in three sellers having to reduce their asking price to secure a sale; unsurprisingly the north of England was the worst hit area
Nicholas Leeming, from Zoopla, said: “With the current economic uncertainty and difficulty buyers face in finding funding, it is no wonder that sellers are having to reduce prices in order to encourage sales,” he said. “And with the latest economic forecasts for 2012 looking decidedly gloomy, sellers may have to reduce their expectations further if they are serious about making a move.”
Whether you are looking for a mortgage advisor in Nottingham or further afield, whether you are a first time buyer, buy to let investor or would just like to move house or find an alternative mortgage then do not hesitate to contact our mortgage specialist, Linda Wood, on 0115 933 8433 or by emailing firstname.lastname@example.org
Your home may be repossessed if you do not keep up repayments on your mortgage.
For providing mortgage advice we will charge an application fee of £299 and we may also be paid a fee from the lender, any fee paid by the lender will be disclosed to you. Alternatively we will charge an arrangement fee of 0.5% of the loan and refund to you any payment received by us from the lender.