The latest figures from the Royal Institute of Chartered Surveyors reveal that the average estate agent managed to shift a measly 12.7 properties in the three months to August – while some are managing fewer than one a week. That’s 47% lower than this time last year, and the lowest figure recorded since the trade body started doing its monthly survey back in 1978.
Although the proportion of surveyors reporting a fall rather than a rise in prices did drop slightly (from 83% to 81%), there’s not much to shout about in the latest RICS report. Demand remained weak, with the number of new buyer enquiries falling again – this is not unusual in August, to be fair, but RICS believes that the difficulty of getting a mortgage remains the real problem. ‘A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery,’ says RICS spokesperson Jeremy Leaf, who reckons the Government’s stamp duty scheme won’t be enough to jump-start the market (fancy that). ‘More needs to be done to reinvigorate a market whose confidence has taken a severe knock,’ he insists.
To add to the general gloom, Nationwide CEO Graham Beale has told the BBC that the problems are now so entrenched that he doesn’t expect to see a recovery in the housing market until 2010 – and in the interim, he expects house prices to drop by about 25%, which would apparently leave 2.5m homeowners in negative equity. In fact, the economic picture looks pretty grim wherever you look – we also heard today that UK like-for-like retail sales were down by 1% in August (thanks partly to the miserable weather), while manufacturing output declined for a fifth straight month, dropping by a worse-than-expected 0.2%.
Still, call us crazy optimists, but there are some reasons to be positive. If mortgage financing is the problem (and this seems to be the consensus view), it’s worth remembering that lending rates are slowly starting to come down – lots of the big lenders have started to cut their rates recently, albeit only for those with bigger deposits. And this week’s rescue of Fannie Mae and Freddie Mac in the US, which led to a bounce in global stock markets yesterday, should help confidence return to the US banking system – which is good news for all of us.
However, it might not be much consolation to those estate agents facing imminent unemployment...
Click HERE to read our special feature ‘Agony of the Estate Agent’, from this month’s MT.