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Britain’s housing market is vanishing before our eyes. It’s not that prices are in free-fall — so far — but the number of transactions actually
completing is dwindling fast.
The slowdown in London has worsened sharply since June. Houses of all prices have been hit, the data from the Land Registry show. By September, the drought had hit hardest those homes priced at about 500,000 pounds close to the median price for the city.
Where the capital leads, the rest of the country is catching up. In September, transactions outside the capital were down 70 percent on the year-earlier period.
In most markets, dwindling liquidity would be a warning sign of an imminent price correction. But in Britain’s supply-constrained property market, it may be helping to support valuations. According to data released by Halifax this week, prices in October climbed 4.5 percent on the year-earlier
period, the fastest growth since February.
How long prices can defy gravity will depend on the rate at which interest rates increase and make mortgages less affordable for buyers. Last week, the Bank of England raised rates for the first time in a decade to curb inflation.
In the meantime, estate agents — normally paid only when a sale completes — and anyone trying to move home is going to find the process even more complicated.
—Bloomberg