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Buyer Fatigue Leads To House Sales Slump

House sales in Coventry and Warwickshire have dipped by 14 per cent in the last quarter, according to the Royal Institution of Chartered Surveyors.

The latest three-monthly housing survey by the RICS, to the end of July, shows “buyer fatigue” in the area, although house prices have remained relatively stable.

Harvey Williams, RICS national and regional housing market spokesman said:

"The figures demonstrate the balance of power shifting from seller to buyer.

"For months the Coventry and Warwickshire housing market has favoured the vendor with prices remaining buoyant.

“However the lull in activity in the period to July shows that buyers are reluctant to meet inflated asking prices."

Nationally, the RICS survey reports a sizable drop in sales activity, with a fall of 7.5 per cent from June to July.

The drop reported by estate agents in Coventry and Warwickshire is double that of the national picture.

In terms of price, the report shows evidence that a North/ South divide continues.

Chartered surveyor estate agents in the South have recorded a plateau in sales activity, compared to an acceleration of prices in the North - a reversal of the trend over the previous 18 months.

Mr Williams added:

"It is evident that potential buyers in Coventry and Warwickshire are exercising an element of caution.

“Jobless figures revealed last week by the Office of National Statistics show a healthy reduction in unemployment, however the number of jobs available in the manufacturing sectors shrunk.

“As Coventry and Warwickshire has such a great dependence on its industrial and manufacturing base this is a worrying trend - the heavy reduction in house sales for July is a result of this.

"Interest rates are also on a knife edge and although figures released by different sectors make for confusing reading, there is still a real possibility they may rise earlier rather than later.

“Clearly, prospective buyers are wary because of this aspect as it could have a knock on effect and increase mortgage payments.

"All the signs show that vendors are going to have to be more realistic about the asking price of their property.

“An element of greed has crept into parts of the region's housing market, but some buyers won't bite.

"As supply catches up with demand, over-optimistic vendors reluctant to reduce prices are going to find that their property does not sell easily."

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CWN / Business / A-Z / Royal Institute of Chartered Surveyors / 22 Aug 00

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This page modified on 10 November 2008 09:49:15AM