What an ‘average house price’ can tell you about your local agent and the market

Some people get very cross with broad headlines about the national housing market.

They complain that for thousands of people their local market bears little resemblance to the ‘average house’ in the UK. Louis D’Espagnac (@PropertyExpert1 on Twitter) director of award-winning Romans estate agents in Reading said recently “Good estate agents & homeowners need to base their figures & market trends on what’s happening on their own doorsteps or their postcode as a barometer as to what the property market is doing in their specific town or village. It’s all about micro-markets & breaking the statistics down to get a true picture of the market.”
Living legend and Chartered Surveyor Michael Day (@Integraps) weighed into the debate: “Big picture fine” he said “but so much concentration, small sample sizes & lazy journalism on national stats, can mislead” and he’s right. It’s very easy for hacks working on national titles and broadcasters to generalise. The groan that greets the Channel 4 national weather forecast reminds us how hopeless it is if all you really want to know is if you need to pack a brolly in Norwich tomorrow.

However, it isn’t easy in three minutes or in just a few paragraphs to summarise the property market when your audience is spread across 24 million homes and four countries. If you want local news, get a local paper. If you want the local weather watch Look North! But it turns out that national trends can be surprisingly useful at a local level – even if it is only to help you judge the success or failure of your own local market. Yet still D’Espagnac persists; “National statistics are of no use to the homeowner in the North East nor in London or the Thames Valley”. he says but I’m not sure he’s being fair.

Using the latest numbers supplied by The Land Registry which are accessible to all courtesy of the excellent tools that rightmove.co.uk provide free in their ‘House Prices’ section, it’s possible to see how many homes have been offered for sale each month in any given area. You can see at a glance how many new properties have been added AND you can see the number sold. These figures will allow you to calculate the chances of selling your home in the next month and the proportion of properties that sells every year.

Nationally I calculate that if you put your home on the market today you have an 11.5% chance of selling it in the first four weeks. Leave it on the market for a year and this rises to about 44% of all homes that offered for sale eventually selling. The fact that most don’t sell comes as a surprise to some but it shouldn’t. Many sellers only chose to go to market because they’ve found another home they prefer and, if they are unable to make that purchase for whatever reason, they withdraw the property. Some will only sell if they get ‘their’ price which in a challenging market isn’t always easy. But how much help is this ‘national’ statistic of 44%?

With Louis’ help I looked at Reading in more detail to uncover what has come on to the market and what has sold. Over the past two years 305 properties are typically on the market in any one month of which around 44 sell. When looking at the last two years we can see that 1,056 (43%) of the 2,472 homes offered for sale in RG1 have sold.

Estate agents by nature must be optimists – their glass must be half full. No one is going to instruct an agent who thinks we’re going to hell in a handcart! Just as when you are pulled over by the police your recollection of your speed can be at odds with the officers’ laser device, so it can be when agents are asked about their own market performance.

Sites like Rightmove and the Land Registry now make the housing market far more transparent. They help us all, buyers and sellers to understand that not all agents and homes are the same. This data enables us to judge which agent we should instruct by providing data on just how good or bad the rest are. Just as you need a league of other clubs to be able to judge the quality of your football team, you need to know how well the rest of the market is doing when you choose your agent.

So, whilst the price of the average house may seem only be of real interest if you ever find that “average house” you can also use the trends to ensure you make the right choice when it comes to choosing an agent, fixing a guide price or indeed making an offer.Remember, when it comes to property as with so many other things “price is what you pay, value is what you get”.

Happy house hunting.

 

 

Henry Pryor is a buying agent and housing market commentator.Read his blog here http://henrypryor.com/