Property prices in the UK still distorted by low sales volumes

It appears the British Government Inc has managed to eke out another 0.1% increase in average sale prices in the UK at the expense of sales volumes. According to the Land Registry, average sales prices have now risen 0.1% to £161,764, bringing the yearly increase up 2.5%

This is on extremely depressed sales volumes and begs the question as to how long this can continue. Typical sales volumes for England and Wales are around 120,000 units and sales volumes are currently around 50,000 units – this is estimated as it is apparently possible to record the values of sales but not count the quantity for another 2 months. Thus the sales volumes lag by two months.

Volumes in London, which is showing increases of 6.1% in value are further depressed – typical volumes are around 15,000 units and just 6,000 were sold in October.

In doesn’t take a genius to understand that depressed sales volumes are resulting in higher average sale prices, because the only stock moving is better quality and the repossessions being delayed by the banks at the insistence of the Government Inc mean the market is being heavily skewed at the moment.

A similar situation occurred in the US with sales averages climbing and volumes falling. Eventually the market corrects – and the US market is just now starting to correct itself with substantial devaluations in many areas. The “shadow inventory,” in the US, UK and Spanish markets is still quite substantial and we see falling prices – quite dramatically – when this stock comes on the market eventually.

Sales Prices UK Property:

Sales Volumes UK Property:

Sales Volumes London:

Th full report is available to down load here – Land registry