Rightmove, the giant property portal has just releasd its latest report about the UK Property market and as you would expect its not great news.
It reports that the average price of new properties coming to the market failed to rise from April to May – the first time this has happened in a traditionally strong property market month since the survey began 11 years ago. Spring is always the one time of year that a raft of new properties come onto the UK market but it doesnt seem to have happened this year.
According to the report, many baby boomers in their 50s and 60s who are now trying to ‘downsize’ are now the main driving force in the housing market.
The already top-heavy property market is becoming increasingly skewed towards cash-rich homeowners, with trading down from a large family house now the single biggest reason given for selling by homeowners approaching estate agents, says Rightmove.
The report says that sellers in their 50s and 60s who are now downsizing to release equity are now driving the market, making up the largest single chunk of those with a motivation to sell property, at 40 per cent of the total sellers.
Some 40 per cent of sellers say they are looking to trade down, compared with 25 per cent who hope to trade up to a larger more expensive property.
This is hardly surprising considering how well many people have done from the property boom that has occurred since the Queen came to the throne. Prices are up more than a hundredfold over that sixty years, says agent Hamptons International, with most of the boost coming in two distinct booms – the 1980s and late 1990s to 2007.
Halifax said property prices dived 2.4 per cent in April. The more important figure in that report, away from volatile monthly prices was that the average house price now stands at £159,883 – the same level as in August 2004.
Nationwide’s April house price index reported that property values last month saw a 0.2 per cent fall – the fourth month out of five that house prices have fallen.
And it warned that house prices, which on average were also 0.9 per cent down on April last year, were set to stagnate or fall throughout 2012, as households’ confidence lagged behind any possible economic recovery.
Trading down is the biggest reason for moving home in nine out of ten regions in England and Wales.
And Rightmove said the trend in downsizing is putting a lid on house prices, with ‘too few buyers to fill the gaps at the lower end of market.’
London remains the sole exception to Britain’s property market stalemate, despite the capital’s high prices. The report said London is the only region where those trading up outnumbers those trading down, mainly due to a higher concentration of equity-rich buyers many of who are fornign buyers in fact Knight Frank reported recently that up to 80% of homes being purchased over £5 million were by forign born homebuyers.
The average asking price across England and Wales stands at £243,759, compared to an average of £469,314 in London – up 8.9 per cent over the past year
The number of new properties coming on to the market was 26,595 in May, down by 10 per cent on April, but this is not leading to a lack of stock, as the number of properties sat on estate agents books has been steadily climbing since January. It now stands at an average of 73, compared to 66 in December.
Are you considering down sizing any time soon?
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