In the last 10 years the average number of completed property sales has been anywhere between 1.3m and 1.6m representing a healthy and active property market.
There has been a significant change in these numbers in the past 2 years and looks set to remain at low levels for years to come.
In 2009 there were approximately 0.6m property sales compared with 0.7m in 2008, this is close to half the number of a “normal” year.
House Network has spoken to leading industry figures who have carried out considerable research in the amount of base level transactions we should expect in any one year. We count base level as a measure of how many forced moves have taken place including people who are relocating for work reasons, downsizing, schooling, divorces, deaths or moving overseas.
The base level of instructions is estimated to be 400,000 per year so if you compare that to the amount of moves in 2008 & 2009 it shows that there are barely a couple of hundred thousand people moving up in the housing market or just deciding to change areas because they have that luxury, in the past this figure has been a healthy 1m.
2010 is set to continue this low trend of transactions and forecasts are predicted to be in the mid 600,000’s again so this really does give an idea of a depressed market and this is why we believe that property prices are not falling rapidly but one thing that could well hit prices is if more properties become available and cannot sell, sellers will be forced to lower their asking prices so this something to be aware of.
What’s holding back the transaction numbers? That’s easy to answer, we have continued difficult lending criteria from the banks who are still nervous after the credit crunch, we have a lack of confidence in people keeping their jobs and historically property prices are just out of reach for many, the number of people renting is on the increase as more and more people decide that owning a property is just a distant dream and until the banks make it easier on the average person then this number of low transactions will continue.
This may be a new era for the UK property market – this could now be just the way it is, after all the near collapse of our banking system will never be forgotten and leaves painful memories for all of us unfortunately for most of us this pain isn’t just a memory - it’s a continued reality.