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Number of home buyers drops to three-year low
Alex Stephens, Evening Standard8 Jan 2008
The number of buyers looking for new homes in London has hit one of its lowest levels for three years.
Figures today show there are now fewer than seven buyers chasing each property on the market.
A year ago, according to Hamptons International, the ratio of its housebuyers to properties was almost 11 to one.
It has recorded a 33 per cent year-on-year decrease in the number of sellers. In 1995 there were almost eight buyers per property.
The slowdown comes in the wake of last year's credit crunch, when the sub-prime mortgage crisis in the autumn saw the number of buyers per property drop briefly to an all-time low of 5.48.
Phil Tenant, manager of Hamptons International's Chelsea branch, said: "We have 12 people for every property on our books. However, our Fulham office has just four people, St John's Wood and Clapham have five and City and Wimbledon have six. There was a feeling in 2006 and the first half of last year that there was a high ratio of buyers to properties.
"Agents and buyers were always complaining there was nothing on the market because properties were coming up for sale and going the next day. It was a nightmare trying to buy and sell houses because people were constantly being gazumped and sales often went to sealed bids.
"The credit crunch has made people take a step back and adopt a more balanced approach. There is now a more healthy balance between buyers and sellers." A straw poll of other estate agents in London showed most now have fewer buyers and sellers on their books than a year ago.
Douglas and Gordon has seen a 30 per cent fall in both.
Director Ed Mead said he expected the number of buyers to continue falling as people held on for better deals.
"In our Chelsea office we have 770 people registered and 66 properties for sale," he said.
"The first two months of this year will be difficult. The underlying trend is that there will be even fewer buyers.
"This is because if you're waiting to buy there is every reason to hang on for more interest rate cuts and for property values to fall.
"A lot of the people who were looking to buy are renting instead."
Knight Frank has seen a similar slowdown.
Liam Bailey, head of residential research, said: "We would concur with Hampton's figures. Since the credit crunch, confidence has been hit and buyers are more cautious. When prices are strong people want to move quickly to beat further rises, but when it slows they are keen to see where the market is going before they jump in."
However, Morgan Randall, which has offices in Canary Wharf and Wanstead, has seen a 35 per cent increase in the number of properties on its books compared with last year.
Keith Colley, sales manager the company's Docklands office, said: "We have almost 100 properties actively on the market. We have also seen an increase of applicants registering.
"With the good news of interest rates going down in December, people are beginning to feel positive again.
"It is fair to say that many agents are struggling in areas that are not so affluent, mainly due to the credit crunch, however I am very confident that the market has become steadier than it was at the end of last year."
Reader views (4)
The UK economy has been brought down to its knees. Years of Socialist mismanagement is taking its toll.
- Peteo, Islington, London, 09/01/2008 10:58
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A change in government will be the only way that the British economy can be revived. We need to turn back the clock on the recent excessive admin and other taxes.
- Georgie, London, 09/01/2008 08:01
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There has been anecdotal evidence for quite some time that buyers were staying away from the market in the Greater London areas. This is now being supported by hard statistical evidence such as provided by your article. In and around the Greater London area properties for sale have been staying unsold for much longer, quite often as long as six months. Even good quality properties, have stayed unsold since the summer of 2007, despite sellers reducing their prices. At the same time, the number of people moving into rented properties has noticeably increased. All you have to do is look around and see your friends and peers renting instead of buying (a sea-change from a couple of years ago). Why, because although sellers expectations are coming down, property prices are still too high and have a lot further to come down. Affordability issues combined with nervousness amongst buyers is not helping the property market, especially first time buyers.... particularly as it is cheaper to rent than buy. Until this ratio is reversed, the demise of the property market is set to continue.
- Tory Boy, London, Emgland, 08/01/2008 21:46
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I guess the HIPS Report tax from Nu Labour is very badly timed.
- Jacqueline, Hampstead, London, 08/01/2008 20:41
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