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RICS: House sales drop 40%

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 12 June 2012  |  Comments 4 comments

Housing sale levels are down 40% compared to five years ago, according to RICS. Yet the figures are not as gloomy as the trade body makes out.

RICS: House sales drop 40%

House sales dropped by 40% in May compared to five years ago, new figures from the Royal Institution of Chartered Surveyors (RICS) have revealed.

May is traditionally a strong month for the property market. Yet fewer than four homes a week were sold throughout last month. An average of just 15.6 sales were recorded by RICS’s member surveyors, compared to 25.4 sales in May 2007.

It’s not just the month of May that makes for grim reading either, according to RICS. In the three months to May, surveyors saw only 23.1% of the properties on their books sell. Back in May 2007, that figure was just shy of 41%.

RICS is very keen for us to see the current situation in contrast to the market’s peak. But if you look back year-on-year, it’s not quite so bad. Indeed, last May, the average number of sales was actually lower at 14.7, having fallen 3.4% from the month before.

And back then, the sales-to-stock ratio was just 20.6%, even worse than it is now. So things have actually improved year-on-year.

Looking at 2010 figures, activity in May is down, but not hugely. In May 2010 surveyors saw 16.6 properties sell on average. That’s one extra sale in the month for each surveyor, hardly the cause for hysteria. And the sales-to-stock ratio was 27%, less than four percentage points more than its current figure.

So why is RICS so determined to beat us over the head with the fact that things are not as good as they were in 2007? Let me know your thoughts in the Comment box below.

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Comments (4)

  • Mike10613
    Love rating 600
    Mike10613 said

    Before 2007 it was too easy to get a mortgage, I think next door's cat got one. Now banks are assessing risks more realistically and the rest of us are paying for their folly. The lesson to be learnt is to save when times are good and invest when times aren't so good. The problem is the banks don't have money to invest and neither does the government. But they can always print some more...

    Report on 18 June 2012  |  Love thisLove  1 love
  • Greg64
    Love rating 2
    Greg64 said

    I agree that the banks are more cautious.... However, thats not the main reasons for our slow down... There a three other factors that most people dont think about... Firstly, the good times are over, Just because your neighbour sold their house 5 years ago, for a certain amount, doesnt mean you house will get the same price today... So, here are the three major reasons.. 1. Estate Agents, shouldnt take any property just to have a listing in their window.. Have some guts, and price that property correctly, no point having the same property listed for 2 years???

    2. Vendors, shouldnt price their properties!! Wake up and smell the coffee, if your property hasnt sold in 6 months or you havent had an offer, or youve had a offer and havnet accepted, well I hate to break up the "visions of grandeur" but your property is only worth what someone is willing to pay!!!!

    3. Subjet to banks approval, because these properties arent being price correctly, when a buyer wants that mortgage for that property, the banks will send someone to value that property prior to being given a mortgage, and if it feels that its not priced correctly, it falls through and no buyer!!

    This is the real problem.... So vendors, either sell at a correct price or become landlords.... If you have listed your property and havent sold in 18 months, its time to think things over again, and remember, were in the worst times since WW2 and its not getting any better, and when interest rates eventually start to rise, your house will be worth a lot less then..

    Report on 18 June 2012  |  Love thisLove  1 love

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