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I'm credited with being one of the first to call the top of the market in an interview for the Today program in January 2007. Since then regular readers will know that I am not an optimist when it comes to the short term future of the UK housing market. I think there is still much pain for many. But I'm seeing something at the moment that deserves comment.
Like seeing a rainbow, you can't help nudge the person next to you and nod and say "see that". Like a hurricane, we may be in the eye of the storm. The winds have died, the sun is shining and you could be forgiven for thinking that the nightmare is over.
Quantity, not quality
Ok, so volumes are just about half what they were a year ago but prices have found a level. There are slightly more buyers than there are sellers although there isn't a long queue of either. If you want to sell, you ought to be able to find a buyer and if you are looking for a home then you need to be quick on your toes.
Homes are selling across the UK at the rate of about 2,380 a day. This is well below the long term average of 3,745 and way below the frothy days of August 2007 when estate agents were churning 4,645 sales out a every day. In the month we learned about an obscure building society in Newcastle called the Northern Rock there 6,000 new properties coming onto the market every single day to replace the record numbers that were selling.
Sellers market?
Today there are just 3,800 new instructions coming onto the market. Buyers have far less choice and sellers can choose any one of half a dozen under-worked agents who will prostitute themselves for your business. Marsh & Parsons registered over 900 new applicants in August according to my friend Peter Rollings.
His only problem is that he hasn’t got 900 new homes to sell these people. So, homes that are selling are fetching more than valuers can believe. Buyers are having to tender for the better homes and the dreaded ‘G’ word is making an unwelcome return (gazumping).
Across the West End in Mayfair the other Peter, Mr Wetherell, considers this the perfect market. He shares his Monopoly Board market with Savills and Knight Frank and thinks that the current balance of buyers and sellers is just about as good as it gets. “What we don’t have is volume” he says “and because of that we have too many agents. Some are going to go”.
Two years ago there were over 12,000 agents knocking property out like falling off a log. Money was made, reputations and the image of the industry took a bashing but this was the boom. People made money out of thin air.
For some this was a great market, but I wonder if the current balance - not quite enough property to sell and just enough buyers to fight for the few that there are, is why those who have been in the business for long enough to be confident that they will be here for some time to come feel that this is actually the perfect market. Enjoy it while it lasts.
