Property Match (UK) blog:

What’s more important than average house prices stats is the following: -

“Our Government needs to revamp the UK housing market completely – and soon,” says Peter Hendry, a Consultant in Housing Valuation and the Web Site Manager at Property Match (UK), a new DIY online house selling web site.

He explains, what’s currently wrong is the way houses are marketed in the UK by estate agents. One way to help would be to rename them all ‘Property Sales Agents’, so that buyers would stop being deceived into thinking that these agents are helping them in some way.

He believes that the stagnation in the number of house-moves over the last few years has been caused mainly by estate agents working exclusively on behalf of their selling clients. “This is totally unacceptable”, he says.

He says, “If one accepts that internal markets are primarily driven by ‘prices’, then UK housing market activity should have been able to continue at close to normal levels of activity in a downturn, even if there would need to be appropriate price reductions during that time.”

But this hasn’t happened. “I base my theory on the fact that demand from those wishing to move house generally remains fairly constant. This was recently confirmed as being the case by Rightmove and it suggests something is very wrong with the housing market. Contrary to popular belief, it isn’t the lack of available mortgage finance, it’s prices”, Peter says.

“I suggest that whilst some people may be put off by falling prices, more would have been happy to move, IF prices could have been held relative to one another, but they’re haven’t been”, he says.

“One of the advantages of keeping them relative to one another would be that those people planning to trade up, and move into a more expensive house, would be more interested in buying at a time when prices are subdued. Also first time buyers would be helped at such a time.”

Peter says, “To understand this concept better, it’s first worth explaining precisely what market value is.
“True market price (or value) is simply relative. It merely compares one type of property with another – at any one time”.

Peter says , “Since the number of house-sales has collapsed, in the housing market generally and asking prices have fluctuated too wildly in many parts of the country, it is now clear that the housing market itself is malfunctioning because at the end of the day, people just want roofs over their heads. Most don’t insist on making huge profits at the same time”.

“I’ve tried to explain this to Government, but to no avail so far”. “It’s not surprising though, as our present government is probably more profit-orientated than the last one! They simply don’t seem to want to see the real problem”, he adds.

“The main problem to be corrected is the disparity between asking prices and actual sold prices. By not changing the way houses are valued by estate agents on take-on, the market will simply continue to stagnate for much longer than it needs to.

Posted by: Property Match (UK)/Asking_Prices: Peter Hendry, Consultant in Housing Valuation