House prices- the facts

We are greeted this morning to our nation’s papers being full of doom and gloom. The Times leading headline reads ‘House market stalls as economy falters’ Is this misleading? Are we on the brink of a housing market dip or worse?

In truth what may actually be happening is that the flooding of properties coming on to the market coinciding with news of severe government cuts does nothing to inspire confidence in an already tenuous housing market.

So let’s separate the facts from fiction. Property prices are falling, that is a fact, and in some areas are remaining stagnant, but this is not the result of a ‘failing’ economy, it is to do with the volume of properties flooding the market.

On FindaProperty.com this supply into the market has risen by 31% over the past 12 months and by 9% alone in June – so there is no argument that, after a period of price rises many sellers have decided to put their homes on the market and see what happens.

Unfortunately, this has the adverse effect of driving property prices down. There are ample properties for perspective purchasers to choose from, this then gives them the power to barter, that’s when prices drop. This does not mean that we are all on the road to economic and property doom.

The other point is that although the property market may be wobbling this month, it is a very regional, not national picture. The Findaproperty.com sales index clearly reflects what the Nationwide and RICS figures also show – that in London, SW and the NW surveyors are feeling a bit downbeat about the market while in the NE, Yorkshire and Humber, Wales and the Midlands there’s a bit of a pall.

But most importantly the same surveyors say things will look up over the next three months – which probably reveals the real story here; everyone is on holiday and buyers are thin on the ground at the moment, while properties for sale are rising.