Reading Between The (Head)lines

Another week and another set of alarming headlines.  Yes – house prices are slipping again.  Or are they?

This week’s news came on the back of another Royal Institute of Chartered Surveyors (RICS) survey which revealed that when asked 32% more member estate agents had reported falling rather than rising house prices in August.

What fewer reporters failed to mention however was the good news behind these somewhat damming top line stats.  In actual fact house prices are up an average 12.1% in the year to July – prompting many estate agents to publically criticise negative media reports on the housing market.

I thought Justin Knight of Bective Leslie Marsh summed up the situation rather well saying:

“The market has levelled after a spring bubble and continues to trade level. It would be helpful if the press could manage to correctly comment on the market confirming it to be level and showing no sign of growth or fall.”

Even the very organisation that had put out this supposedly worrying report was at great pains to stress the positive aspects of its findings. 

RICS spokesperson Jeremy Leaf said: The latest set of results suggests prices in many of parts of the country may be slipping but this does appear to be encouraging hopes amongst surveyors that sales levels could begin to pick up.”

And he was not alone.  For more detail I would strongly recommend watching RICS’ Simon Rubinsohn’s interview with the BBC which can be found here.

All in allRICS concluded that the outlook wasin fact rather positive.  The index itself showed that 18% more RICS members were forecasting a rise in sales compared to just 8% in July.

The overwhelming mood among the agents surveyed was that August had been an extremely quiet months for the market – and there were buyers waiting in the wings. Our own experience of the new homes market echoes this.

What’s more RICS also reported a narrowing of the gap between demand and supply despite a fall in potential new buyers.  There were 12% more agents reporting a rise in instructions than a fall (compared to 33% the previous month).  This compares with 17% more reporting a fall in potential buyers compared to 10% the previous month.  The gap between the two was trimmed from 43% to 29% which as RICS themselves concluded is the “best lead indicator of future prices.”

Bearing in mind all this – perhaps the headlines should have been; “House Prices About the Same as Before” but that wouldn’t sell as many papers would it? Which is why it’s always good to read between the (head)lines.

Sue Warwick National Sales and Marketing Director Miller Homes