Now, around 5 years since the UK housing market went from boom to bust and all that has happened during what has been a volatile 5 years is that the market has fallen into a state of stagnation according to a new report from the Royal Institute of Chartered Surveyors.
RICS said house sales averaged 15 per member in the three months ending May 2012, whereas they made an average 25 sales per member in the same three months in 2007, a 40% drop in house purchase activity.
Once again, the banks are blamed for the situation, or rather their "reluctance" to lend, which seems to have gotten worse instead of better during the last 5 years.
Peter Bolton King, of RICS said: "Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market."
Bad enough that sales are so weak and lending still so tight, but arguably worse is the fact that sellers still have wholly unrealistic expectations on asking prices according to the RICS survey. This is backed up by the asking price index of the UK's largest property portal Rightmove, which consistently shows asking prices rising. Rightmove reports on increasing confidence among sellers but it is more delusion than confidence according to the RICS report.
Andrew Oulsnam of Robert Oulsnam in Birmingham said: "Vendors still have unrealistic expectations on price."
"Managing expectations is key in the current market," agreed Derek Coates of Venmores in Liverpool. "It is still the case that a realistically-priced property will find a buyer."
"Realistic lower prices may lead to a boost in sales," said Mr Bolton King.
Indeed it is worrying that even after 5 years of near-complete misery (complete apart from a flurry in the south in 2010) that we are only now concluding that stagnation has arrived. Unemployment is too high, wage growth is too slow and lending is too tight, but asking prices have continued to rise and sale prices haven't even fallen far enough. It is unsurprising that some agents are predicting that the current stagnation will be the norm for the foreseeable future.
- Friday 15 June 2012