Property Price Market Update June 2009

The Problem with Property Price Reports
What statistics tell us what’s happening in the property market
What are these statistics telling us?
What’s causing the Statistics to Show a Recovery? Is it Sustainable?
If you currently have your home for sale and are considering buying, ignore National Statistics!
Why don’t these national statistics reflect local markets?
What is the Regional Picture for Housing Recovery?

The Problem with Property Price Reports

The first problem with property market reports is that they are led by industry press releases, rather than proper statistical analysis of all the facts. As a result, we have reports one month of prices rising and the next, prices falling. The second problem is they are reported at a national level which misleads buyers, sellers, renters and property investors.

What statistics tell us what’s happening in the property market
The fact is that price movements are not the determining factor of whether a market is recovering or not. It’s all down to volume analysis of supply and demand. This is information about the number of first time buyers, the number of mortgages borrowed, the number of properties an agent is selling, whether the time it takes to sell a property is going up or down and whether the increase in the number of buyers looking for property is more or less than the increase in number of sellers.

What are these statistics telling us?
Nationally the figures suggest that property prices and falls in sales are starting to bottom out. (However see below for regional variations). The first signs of this are figures from estate agents which show they are consistently increasing the number of properties they are selling and are currently selling around 10 per month (NAEA). The second signs are more applications and acceptances for mortgages, which again have consistently increased. Finally the time a property is on the market has fallen for the first time in a year below 10 weeks (in a normal market it would take 6-8 weeks to sell a property) and the average offer versus asking price is 90%, up from a low of 88% (compared to a normal market of 95-98%). Finally, the number of sold versus for sale boards have increased from 14% back in October to 28% in May.

All this data tells us that there is definitely increased activity in the housing market, albeit at around half the volume we would do in a normal market.

What’s causing the Statistics to Show a Recovery? Is it Sustainable?
However, monitoring and reporting on statistics alone is not enough to say whether this is a recovery or a blip and especially whether it’s sustained or not.

The simple reason these statistics look better because sellers on the market have dropped their prices and those that would normally be selling are not putting their properties on the market. Rightmove haven’t seen so few new sellers since May 2003. Don’t be fooled by political manoeuvrings that this is because of HIPs. HIPs or no HIPs, unless you have to, why would anyone put their property up for sale in one of the worst markets we’ve ever seen?

Especially as many who would be moving at this time can’t because they haven’t had any equity growth, or they have actually seen their equity decline, disappear of go negative.

The market starts moving forward more quickly as buyers see less properties coming onto the market and properties they considered buying start to sell. This, together with favourable reports from the media, gives people more confidence to make an offer, so market activity statistics start showing that it’s moving forward.

Is it sustainable? Probably not all year. The current flurry in activity is more from frustrated buyers and sellers who didn't buy last year or in the first few months of this year. Some property markets have already bottomed out, the New Homes market for example is unlikely to fall anymore this year and is increasing in some places.

However, as summer comes and is traditionally a poor time for property sales, especially in August, the market is likely to go quiet again. It'll then improve September and October and go quiet again in Novermber and December. In areas that are struggling to recover, this will cause prices to drop further, while in areas that are short of supply, prices will stabilise and may even rise as buyers compete to purchase.

So in summary, it's a mixed picture for the property market to the end of the year and price falls/increases will depend on the property type and the area you are selling in.

If you currently have your home for sale and are considering buying, ignore National Statistics!
National property statistics are useful for the government, the financial industry and the retail sector whose sales are affected by property market growth or decline. As an individual, selling a certain property type in a certain area, average, national statistics are completely irrelevant!

So you should concentrate on statistics that can be identified for your local area and feedback from good local estate agents. See for example,; and read our article ‘How to spot the bottom of the market in your area’.

Why don’t these national statistics reflect local markets?
We have an incredibly diverse housing market. We have property types such as new homes through to Listed properties, studio flats to mansions and properties in city centres or out in the sticks. The demand and supply of each property is completely different from one area to another. As a result the market for two bed flats in the city centre of Manchester might be falling, while in Beverley, Yorkshire, there might be hardly any flats and demand is high, so prices might be rising.

What is the Regional Picture for Housing Recovery?
Anything from awful and no recovery to a lack of supply versus demand and as good a recovery as an area can get with the artificial limits still in place on the lending front.

As the key market indicator for recovery is the number of properties sold versus for sale, data from For Sale Sign Analysis shows the top 10 areas that are showing recovery while the bottom 10 areas are as bad as they were last year.

Click here for Worst Performing Areas
Including: West Bromwich, Swansea and Gateshead

Click here for Best Performing Areas
Including: Fleet, Cambridge and Bromley

Want FSSA data for your particular area? Then call 0845 308 2004 or email

It’s also worth reading Savills in depth Residential Focus Report on which areas will recover first and likely regional grow over the next ten years.




Free Property Articles

  Hiring Builders and Professionals
  Are property prices going up or down?
  Make sure you know how to Plan and Organise Property Renovation and Home Improvements
  Costing your Property Renovation and Home Improvements
  Where do you buy in the UK? Next to new train lines!
Kate's Consumer Portal
FREE Buy to Let eBooks

Download a copy of our
Buy to Let Show eBooks
for FREEsimply click on
the image below

Buy to Let Show - download our Buy to Let eBook for FREE