LONDON (Reuters) - UK home sales are likely to remain about a quarter of a million below trend in 2008 after a 20 percent drop in the second half of 2007, Britain's biggest estate agent said on Tuesday.
Grenville Turner, group chief executive of Countrywide PLC, told the Reuters Housing Summit that up to 1.1 million transactions were likely this year compared with a long-term average of 1.35 million.
But that depended on a return to a more "normal market" in the second half of the year as economic confidence recovered, a global credit crunch eased, and as hesitancy on the part of house buyers gave way to pent-up demand, he said.
Countrywide is Britain's biggest estate agency group, with around 1,300 branches operating under more than 40 different brands. It was taken private last May by U.S. private equity group Apollo Management L.P., which also owns U.S. real estate franchisor Realogy Corporation.
Turner said there was little clear evidence to show actual UK house price inflation or even sellers' asking prices had turned decidedly lower.
"We haven't seen a huge downward pressure on prices," Turner said, while recognizing regional differences in supply and demand which continued to support London, southeast England, and northern Ireland but was dragging on southwest England and northern English cities like Leeds and Manchester.
He said there was generally a lag of about 3 to 6 months before the pressure to move home built up to a point where property prices were cut and that pricing expectations might have to ease by up to 10 percent to improve trade.
"People find it very difficult to accept selling their property at a price lower than what they think it once was," he said. "If they can overcome that emotion and believe that they can get a 5 to 10 percent discount on the property they buy they will actually get a better deal, and that is our job."
Turner also said Countrywide, which helped to arrange the mortgage finance on 60 percent of the deals it brokered, was not finding it an insurmountable problem to source funding for clients with poorer credit records or with limited equity -- as long as they were willing to pay for it. Continued...
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