Tuesday 9 September 2008

UK Housing market collapse continues

Here was my prediction for 2008:

"The UK Housing Market will slow much faster than most economists are predicting and the overall rate might touch 20% by the year end. Those viewing the market are not factoring in the role of psychology enough into the falling market. My friends who are estate agents reckon they will all have closed within 3 months - so things are looking pretty bleak."

Well, good as my predictive capacities are, this seems like good foresight to me. If only
I had been able to persuade the missus to sell last year...

In any event the news today is that estate agents are selling one house a week. If we assume this is an average house of £175k with an average 1.5% commission, then agents have a weekly income of £2650. This has to cover staff wages, advertising, bills, taxes, transport etc. Not may businesses are going to make it on £10.5k a month turnover - what profit could be taken out of that annually for the owner?

This demonstrates two things, firstly, there needs to be more retrenchment in this sector as it is over-supplied for the current environment. Secondly, that with such low volume prices may well be hit by a sudden adjustment downwards that will be catalyst for demand. Similar to the 'capitulation' in stock markets.

A key knock-on for this is to the retail property market, already flooded and struggling. Perhaps even a chance for more aggressive retailers to expand and lock-in low rents?

For what its worth, the 20% ish fall we have this year I can see being followed by a 10-15% fall next year until prices flatten out. The market really needs the repossesions to be brought to market to cause the capitulation event. That or Alistair Darling can wave his magic wand this week and make more trouble for us all in the long-term.....

8 comments:

Old BE said...

I think I shall sell my flat back to the council at its original 1990 price......

Anonymous said...

"an average 1.5% commission"; am I right in thinking that in the US realtors expect to be paid 6%?

Bill Quango MP said...

CU... There needs to be more retrenchment in this sector as it is over-supplied for the current environment.

GB's much touted housebuilding program [still on track according to hit the target says Caroline Flint]of 3 million homes by 2020, seems a little pointless? Or is it actually very wise getting houses built by desperate contractors while times are tough?

CityUnslicker said...

Dearime - I had no idea...really must have been a drvier behind the boom..wow!

BQ - Expect Darling will encourage state to buy houses in the next few days and build more. They always get it wrong...

Richard Elliot said...

I know an estate agent in my area. Two agencies have recently closed, there are rumours rife about more going under and he is struggling, but thinks he can ride it out.

Not a pretty time to be in the sector.

Recruitment consultants have recently had a big change in attitude too!

Mark Wadsworth said...

CU, may I smugly remind you that I did manage to persuade the missus to sell up at end of last year?

OK, the fact that I had been mugged at the end of the road and told her in no uncertain terms as soon as I got home that we were selling up and doing the white flight whether she bloody well liked it or not may have helped.

tanyaa said...

The UK housing market is one of Britain's favourite topics of conversation. There is eith much (barely disguised) gloating over how much your house is worth; or there is also a large section of new first time buyers who despair at the cost of trying to buy a house. There also seems to be endless speculation about the future direction of house prices.
----------------
Tanyaa
Buzz Marketing

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,