New 40 Year Low Expected in House Sales for This Year

New 40 Year Low Expected in House Sales for This Year

The supply of homes available for purchase on the market has fallen as homeowners with starter homes are staying put and not upgrading to larger properties.  Without buyers in the market few homeowners expect to sell so they are staying put rather than having to take less than expected for their property.  Hometrack has issued an expectation that the level of housing turnover will be the lowest in 40 years when 2011 closes out.

Hometrack expected 840,000 sales this year which is 50 per cent lower than the level seen in 2007 when the recession began.  The latest housing survey revealed that in November the house prices had fallen 0.2 per cent from the previous month.  For the year house prices are down 2.3 per cent when compared to last year and prices have fallen every month since July 2010 except in April 2011 when there was no change at all.

Remortgages have outnumbered house purchase mortgage lending.  Since homeowners are finding it hard to put their property on the market and find a buyer they are choosing to remortgage and fund renovations and improvements on their own property.  Not only does this create the property they would have liked to upgrade to but it is an investment into the property which will be more valuable once the housing market recovers.

Richard Donnell, director of research at Hometrack, said, "2011 looks set to register the lowest level of housing turnover for 40 years - a trend which Hometrack expects to continue into 2012. An expected 840,000 sales in 2011 is almost 50% lower than in 2007 and equates to the average private sector home changing hands every 26 years. This is creating a scarcity of housing and is acting as a support to pricing levels."

Obligation Free Remortgage Quotations

Get a Quote »