2011 property sales will be lowest in 40 years

28 November 2011 | By Tessa Norman

In its latest national housing survey, the firm says it forecasts 840,000 sales for 2011 and expects this trend of low transaction levels to continue into 2012.

The analysis shows that house prices fell slightly in November, by 0.2% compared to October, while the number of new buyers registering with estate agents decreased by 2.2%. Hometrack says demand from new buyers is likely to decline further in the run up to Christmas.

There was a 4.6% rise in the number of sales agreed, but the number of property listings fell by 0.8%, and the average time on the market rose slightly from 9.8 weeks to 9.9 weeks.

Hometrack says that low sales levels and increasing realism on pricing among sellers looking to move before Christmas are supporting headline indicators of housing market activity.

Across the country house price falls were seen in 32% of postcodes. The greatest pressure is in the South West, East Midlands, Wales and North West where prices fell by over 0.3% in November.

In London prices remain unchanged for the second month in a row but Hometrack says that looking ahead the capital is unlikely to escape the impact of continued turmoil in the financial markets. It says that when prices start to fall in the capital the scale of headline price falls will start to accelerate.

Richard Donnell, director of research at Hometrack, says: “The economic and financial backdrop to the UK housing market remains far from positive but over the last three years the sector has adapted to an environment where low turnover and constrained finance have become the norm.

“House prices have fallen consecutively over the last 16 months but on a year-on-year basis they are down just 2.3%. While demand may have fallen for the last four months in a row there has been no significant acceleration in price falls. This is at odds with consumer confidence which over the same period, has fallen considerably.”

He adds that the low level of property sales this year is creating a scarcity of housing supply, which is helping to prop up prices.

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