Plunge in house sales could see lowest turnover level for 40 years

Hometrack said 840,000 sales are expected this year – almost 50 per cent lower than the figure for 2007, cementing expectations of the low milestone for 2011.

The analyst’s latest housing survey showed that prices fell by 0.2 per cent in November from the previous month, following another 0.2 per cent tumble in October.

Prices are down by 2.3 per cent year-on-year and have fallen every month since July 2010, apart from April this year when the market was flat with no change recorded.

Hometrack said prices are being propped up at the moment by people’s reluctance to put their homes up for sale, creating a scarcity of supply.

Richard Donnell, director of research at Hometrack, said: “2011 looks set to register the lowest level of housing turnover for 40 years – a trend which Hometrack expects to continue into 2012.

“An expected 840,000 sales in 2011 is almost 50 per cent lower than in 2007 and equates to the average private sector home changing hands every 26 years.

“This is creating a scarcity of housing.”

Hometrack said the tough economic backdrop means that only “committed sellers” are putting their homes on the market and meeting what buyers are prepared to pay in order to push sales through before Christmas.

It said that a weak UK economy coupled with eurozone turmoil had seen a “rapid reduction” in new houses coming on to the market, with 0.8 per cent fewer property listings in November.

This is acting as a counter-balance to weakened demand, which fell by 2.2 per cent in November, Hometrack said. The average time for a house to stay on the market rose to 9.9 weeks in November, up from 9.8 weeks the previous month.