According to responses to a confidential survey of 100 estate agents carried out by The Economic Voice, house prices in the UK are crashing with the North East and Wales being hit the hardest.


This new information flies in the face of Rightmove's data that suggests that asking prices have risen 3.1% over the past month but supports the Halifax report of a 3.6% drop in house prices during September.

I don't want this to sound like a triumphant vindication for commentators such as myself for shouting the warnings of a house price crash for the last few years seeing as the spectre of negative equity is a divisive one which tears families apart and I take no joy in such an eventuality with such deep consequences.

However, the housing market has been spooky in its defiance of gravity or so the official statistics tell us, but it looks like there may be more going on than meets the eye.

All estate agents surveyed painted a gloomy picture even in London and the South East which has been the most resilient area in the country to the mortgage famine thus far however the surveyed agents were convinced that this resilience is due to a higher level of cash buyers in the region.

Morale in estate agents is at an all time low with most estate agents desperately trying to persuade vendors to lower their prices to achieve a sale. 91% of surveyed agents believed that asking prices do not reflect sale price and many are left scratching their heads wondering why the official statistics are not painting a much gloomier picture.

43% of those surveyed said that they had sold a property at least one property for less than 50% of the asking price and nearly all said that property was overpriced for a sustainable market in their respective areas with lenders not interested in exposing themselves any further to the property market than they need to.

But all respondents agreed that there has been a marked shift with sellers prepared to take much less than the asking price for their homes and this has lead to achievable sales which has brought some revenue to estate agents since the introduction of tighter lending requirements for mortgages  was implemented by lenders.

One Cardiff based estate agent manager said "The myth that there is a housing shortage in Britain is a lie but we do have a lack of affordable housing. We are now turning down properties if the seller is not prepared to price at a sellable price. We could take on as many as 30 houses a week if we wanted to but what is the point in spending money on advertising houses that are priced too high?".

Another estate agent from London said "We are selling houses and still in the business of selling houses but without mortgage products we are at the mercy of cash investors".

"If it were not for these investors our sales would be down at least one third".

Only 13% of those polled expected a full recovery moving into growth in the housing market with the next 2 years but 88% expected a recovery within the next 7 years.

Well that doesn't look like a housing recovery and I seriously wonder why so many estate agents when quoted directly in the press actually keep talking the housing market up?

They know there isn't going to be any semblance of a recovery any-time soon so surely it would be far better to have a lower profit margin/higher sales business model and tell it like it is.

Or perhaps there is the genuine fear by estate agents of retribution from people who have bought property off them after being told the house is a bargain only to find its value has fallen by 30% and are now in negative equity.

The reality is high house prices are detrimental to our society and quality of life except to a hand full who were lucky enough to get in at the bottom and out at the top of the housing market.

If anyone is looking forward to releasing equity (If they can) in their homes and risking their own financial stability so they can give their children enough money for a deposit on a house then fine.

Personally I think there is something very wrong with a society that is precluding the young and first time buyers from the property ladder just so a few people who have placed all their retirement eggs in the property basket can live in luxury.

But now house prices are crashing we should take the liability from the mortgage holders and place it back into the hands of the lenders who so far have felt little to no pain as a result of their risk taking that fuelled the housing boom.

Been putting off making that will? Click HERE for our on-line will making service!

Comment Here!

comments