Current Property Market: Mixed picture, determined buyers and sellers succeed, half hearted efforts fail!

publication date: Jun 28, 2011
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Property Prices in 2011


Current Property Market: Mixed picture, determined buyers and sellers succeed, half hearted efforts fail!


There is no doubt we are in a very unpredictable and varied property market - reports from estate agents I work with suggest this is the most difficult time they have experienced. The market just doesn't seem to be that clear what it's doing from one month to the next.

One agent I spoke to says he's taking on properties that he thinks will sell quickly despite tough market conditions and others that are going to take a while to shift, only to find that the tough ones go instantly and the great properties seem to stick.

For Sale Sign Analysis shows the percentage of properties being sold versus those that are for sale has fallen back well below last year and continues to decline month on month at the moment, suggesting a real slowdown in offers on properties. This might however be due to some over pricing by vendors hoping to get ‘top dollar' for their properties, only to find that they have priced themselves out of the market.

FSSA Data

Jan

Feb

Mar

Apr

May

2011

23.1%

23.4%

23.7%

22.4%

20.7%

2010

26.0%

26.4%

25.4%

26.5%

30.9%


Latest data from Hometrack indicates May was a slightly better month than April for sales exchanged, thanks to there being slightly less Bank Holidays than in April and no Royal Wedding to distract buyers and sellers. However, May suffered a slight fall in the number of buyers registering to look for property, while more properties came on the market for sale, suggesting slight price falls in areas other than London (which continues to ‘boom' in comparison to the rest of the UK).

Current Hometrack Data

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Average*

Offer to asking price (ie £95,700 offered for a property advertised at £100,000)

91.9%

92.4%

92.7%

92.6%

92.7%

95.7%*

Number of viewers (ie you need 10 viewings to secure an offer)

11

12

12

10

12

10 *

Average number of weeks to sell (ie it takes on average 10 weeks to sell a property)

          10.0

          10.0

             9.9

             9.6

             9.7

 6*


Regional variations continue to be the real difference between this credit crunch property recession versus the one in the 1990s. For example, Hometrack note "In London the time on the market (5.9 weeks) is around half the level seen in the Midlands and Northern regions (11.5 weeks)."

The National Association of Estate Agents data continues to show the number of properties for sale was still up year on year, but not changing substantially from one month to the next with the average agent having between 68-70 properties on their books (10% more than in 2010). The number of properties sold doesn't seem to be improving at all, so on average, each agent is selling around eight properties per month.

NAEA Data

Jan

Feb

Mar

Apr

May

2011 - No of Properties Sold

6

8

8

8

8

2010 - No of Properties Sold

6

6

8

8

8

YoY

0%

33%

0%

0%

0%

  

 

 

 

 

 

2011 - Agent Average Stock

69

70

68

69

68

2010 - Agent Average Stock

55

56

60

62

62

YoY

25%

25%

13%

11%

10%


Data from estate agent members of the Royal Institute of Chartered Surveyors shows a similar picture with a steady average of 14-15 properties sold, although they show a large rise in properties for sale - up by 16% year on year and jumping by 7.5% in May versus April.

RICS Data

Jan

Feb

Mar

Apr

May

2011 - Average No of Sales

15

15

14

15

15

  

 

 

 

 

 

2011 - Agent Average Stock

68

68

65

66

71

2010 - Agent Average Stock

65

63

61

62

62

YoY

5%

8%

6%

7%

16%


So with the supply of homes for sale on the increase and not really much movement in the number buyers looking to purchase a home, the likelihood is that in many areas properties will see small declines in the coming months. Some areas will stabilise - for example volume sales in the South East are on the slide, suggesting the market is stagnating again. The only exception to this is London where price increases are likely to continue in the well off areas as the number of buyers continues to outstrip the number of properties for sale.

The trick to selling in the current market is to price aggressively against the competition to secure the viewings. For buyers, you can afford to take your time this year - unless you are in wealthy London suburbs and/or fancy buying a fairly unique but popular property in economically successful areas.

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