Subdued market and over supply suggests house prices will continue to fallHome buyers in general are displaying more caution with many putting off the decision to move but sellers have been reluctant to accept lower prices unless their circumstances dictate a quick sale. This stalemate has meant that properties are taking longer to sell at a time when the number of houses on the market increases. However, it appears that it is the sellers that are beginning to reluctantly bite the bullet and are now regularly having to reduce their asking price by more than 6% to clinch a sale.
After its sales dropped by 16% in the first six months of this year Bovis Homes has described the housing market as subdued. It is not just Bovis who are feeling the pinch as the slowdown in the house sales over the past year takes effect, house builders Taylor Woodrow and Wimpey have also reported reduced profits. It is also bad news from DIY chain B&Q where the slow market is being blamed for poor sales of kitchens, bathrooms and bedrooms.
The Land Registry recently reported a sharp drop in the level of house sales, and the mortgage lenders report that the market is in the doldrums. The whole property market is currently going through a long overdue reality check. Fewer buyers, lack of confidence and an increasing number of properties for sale indicates that prices will continue to fall.
16th December 2005
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