In a couple of articles in the past week industry leaders have raised the issue of restricted housing supply in the market.
To track the rate of flow of stock, Home.co.uk has created the Home Market Turnover Indicator (HMTI), which combines monthly data on overall stock levels and average marketing times from 2005 to the present day.
The tool is designed to help anyone involved in the home buying and selling process to understand the overall flow of properties moving through the market.
During the 2007 boom, the HMTI reached 10,000 properties per day. The overall trend over the last three years has been downward with stock levels falling rapidly.
Currently the HMTI is at 2,761 properties a day, with turnover 14% lower than it was in June 2012.
Based on current average prices, at the current low rate of turnover, Home.co.uk estimates that there is £656 million of property value flowing through the market per day.
At the 2007 peak close to £2.5 billion moved through the market each day.
Doug Shephard, director at Home.co.uk, said: "Rising property values are less significant if sales activity is stagnant or falling. Hence, it is vital not to overlook the pulse of the sales market.
“Translating the daily rates of turnover into money flows helps the observer gain a genuine perspective on the health and wealth of the marketplace.
“To consider that the flow of wealth at the pre-crisis peak was 277% more than today’s rates is very sobering news for any party involved in the buying and selling of residential property.
“It is not just about cash flows between financial institutions. Lower transaction rates have a very negative impact on local economies.”
Are you concerned about the current supply rates? Do you think volumes will significantly increase soon?
