House Price Market Update for December 2010
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End of year analysis from all the property price indices and agents for 2010 in December agree that despite some rises in the first half of the year, the falls in the second half of the year, meant the average house was worth pretty much the same at the end of the year as at the start.
Past Property Price Indicators
At the start of the year, the average property price according to Land Registry (England and Wales) was £164,795 and during 2010 it peaked at £167,089 in August, but has now dropped back to £164,773. These compare to 2009 when January recorded an average price of £156,324, peaking at £161,420 in December 2009.
These numbers however are somewhat far away from the peak of 2007 when the average property price was £183,084, suggesting that prices have recovered from their 20% falls to around 10%.
This suggests that prices on average, have recovered to around the levels last seen in the summer of 2006. From a moving perspective, on average people sell and buy around every seven years and for movers to be able to do this in the next few years, prices will need to move back up to around £172,000 for people to be able to afford to move in the next few years.
Current Property Market Indicators
Demand for properties remains pretty low but so does the supply of properties, which is why the 'crash' that first time buyers are hoping for hasn't happened as yet.
The number of forced sales (repossessions) remains very low across the UK (around 40,000) and this together with low property supply is helping to prevent the crash. Although the repossessions tend to be fairly regionalised and even quite localised, so some areas, particularly in the North East and West are causing larger than average property price falls.
From a buyer's perspective, most are looking, but holding off until the media reports improve and they can see that prices aren't going to fall anymore. It is likely that fairly negative media reports for the first few months of the year are going to keep stocks low and buyers wary of purchasing. This is likely to push month on month prices slightly down and then by the late spring/summer we will start to hear a lot of 'negative' news as people are made redundant in the public sector and spending cuts really start to hit people's wage packets.
Future Property Price Indicators
Confidence is the key drivers for property sales to grow and prices to rise. One of the other key indicators is the availability of finance. Unfortunately for 2011, certainly in the first half of the year, both of these indicators are likely to be at an all time low.
The media will be reporting slight month on month sales via the property price surveys and only small rises year on year (around 5% from the Land Registry figures). Doom and gloom of job losses and economic issues will continue as will regular warnings of the rise in petrol and food prices and people's wage packets being squeezed by the VAT hike and increased taxation.
As a result, prices in 2011 will in the main be steady, with maybe minor falls in some areas, minor rises in supply restricted areas and some relatively serious falls in areas that are hit hardest by public sector cuts.
READ MORE - Read Kate's latest summary on the property market and find out what's happening in your area, ignore the headlines, let Kate help you work it out for yourself. READ MORE
What should Buyers and Sellers do in 2011?
From a sellers perspective, you need to research your local property market extremely well, making sure you choose agents to value your home who have recently sold similar properties. Don't choose the agent which sets the highest valuation or the one that charges you the least - you'll end up on the market for ages!
Also, as a seller, make sure your property fits what buyers want. Either to buy a wreck at a bargain or buy a property that looks like a showhome!
2011 could be one of the best year's to buy if you have enough deposit and take care to research the property you want to buy. Make sure it's structurally sound and that the price you pay, is if you can, ideally 10% below market value to protect you from any further falls and will mean you have some built in equity should you have to move for any reason.
If you plan to buy, make sure you have a clear view of your current and future financial commitments when mortgage hunting and that you use a good local qualified surveyor to value the property for you. Take your time though and ensure you don't overstretch yourself and can stay in the property for at least five years to see the market through to recovery.
Performance and commentary since January 2009:-
Click here to see our latest buying/selling articles
Headline Statistics for December 2010
Headline Statistics | Statistics | +/- | Source | Month |
Average Prices | £164,773 to £222,410 | +2.2% to +0.4% YoY | Land Registry Lowest
Rightmove Highest | Nov/Dec data |
Transactions* | 60,979* | +3.76% YoY | Land Registry | Jun to Sep 10 |
Time to Sell | 10 Weeks | Slightly up on last month | Hometrack | December |
Number of viewings to sale | 12 | No change on previous month | Hometrack | December |
Offer to Market Price | 92.1% | Slight reduction on last month | Hometrack | December |
% change in new buyers registering with agents | -4.8% | A decrease on previous month | Hometrack | December |
No of houses sold by agents | 7 | No change on previous four months | NAEA | November |
% sold versus for sale boards | 22.3% | Slightly up on last month | For Sale Sign Analysis | December |
Number of new mortgages | 48,019 | Slightly up on last month | Bank of England | November |
* Per month
Sold versus For Sale Sign Boards data*
Month 2010 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
Percentage
Sold | 26% | 26.4% | 25.4% | 26.5% | 30.9% | 25.5% | 26% | 25.8% | 22.3% | 24.4% | 24.8% | 23.3% |
Month 2009 | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
Percentage
Sold | 16% | 12% | 17% | 19.5% | 21.1% | 28.3% | 29.5% | 30.2% | 36.3% | 27.3% | 31% | 34% | 26.7% |
*Data provided by FSSA, for more information on this data,
Contact usLinks to useful Buying and Selling Reports
Price Indices
There are at least seven property indices and other companies that comment on the property market, please checkout the links below:-
Rightmove Halifax Nationwide RICS
Communities Financial Times Land Registry Other Useful Property Analysis
Winkworth's Winter 2010 Market Analysis
DOWNLOAD - Savills Residential Property Focus for Winter 2010
Knight Frank - Residential Market Update and Forecast
For more market commentary on a national or local level:-
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