Market volumes remain thin, with the number of new sellers measured in this month’s House Price Index at 89,140. The number of properties coming to market is now similar to the level recorded at the same time last year, though still some 30% below the volumes seen in 2007.
While this shortage of stock has helped prices to stabilise, and then begin to recover, lower volumes mean that fluctuations due to seasonal volatility are exaggerated. People who can choose the timing of their move tend to own the better-quality and more expensive properties, and they are naturally reluctant to come to the market over the summer holidays or in the run-up to Christmas. Accordingly, prices fell over July and August, recovered in the early autumn as more properties came to market, and have fallen again as Christmas approaches.
Shipside said: "Many would-be sellers are still unwilling or unable to come to market, and with the number of new build properties running at half of the levels required to satisfy anticipated demand, aspiring home-movers are set for a frustrating time for years to come.
"Norman Tebbit once urged people to get on their bikes and look for work, but it’s much more difficult for homeowners to take up jobs in other parts of the country if they have insufficient equity in their current property to get a new mortgage at a competitive interest rate."
The extent of the market recovery from the dramatic price falls seen last year is shown by year-on-year price rises in seven out of ten regions, resulting in an average national rise of 1.6% compared to November 2008.
A majority of the country now has average asking prices that are above those of 12 months ago. Only the East Midlands, the North and the North-West remain in negative year-on-year territory. The East Midlands is the worst performer with prices 1.6% below those of November 2008, with the North down 0.6% and the North-West just short of breakeven at minus 0.1%. The southern regions show the largest increases, with the South-East leading the way with an average rise of 3.8% driven by the lowest average stock levels per estate agency branch. At the other end of the scale, the three regions still in negative year-on-year price territory have the highest stock numbers per estate agency branch.
Shipside said: "The shortage of stock is worse in the south than it is in the north, leading to greater upwards pressure on prices due to higher numbers of willing and able buyers who have fewer properties to choose from. Recoveries tend to start in the south, and with mortgage lenders favouring buyers with larger deposits and greater job security, it is no surprise that the trend has been repeated this time round. With parts of the north of the country also clawing their way back to a year-on-year price standstill, we recorded an average annual national rise of £3461. That would have looked pretty far-fetched a year ago."
Meanwhile, the stamp duty holiday, exempting properties between £125,000 and £175,000 from the 1% tax, is due to end on 31 December.
Shipside said: "Buyers hopeful of beating the stamp duty deadline should not leave it to the eleventh hour, especially if their legal team are not working over the festive break. We may yet see a last-minute rush of transactions, but the balance of property availability in the exempt band remains virtually unchanged. The incentive has been rendered almost irrelevant by lenders’ high deposit requirements. However, its withdrawal adds to the uncertainty surrounding the property market in 2010, which will also have to cope with the slowdown that an actively contested election always brings."
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