UK house sales fall to less than one a week

Subject: UK house sales fall to less than one a week Tue Oct 14, 2008 6:45 am

The dismal state of the housing market was highlighted today as mortgage lending to first-time buyers plunged by 55 per cent to a record low and estate agents reported that they were struggling to sell even one home a week.

Banks and building societies approved home loans for just 15,600 new buyers in August, compared to 34,800 in the same month last year and the lowest figure since records began in 2002, according to the Council of Mortgage Lenders (CML).

The lack of first-time buyers in the market is having a disastrous effect on estate agents as sellers struggle to complete sales.

The average number of sales per agent hit a 30-year low of 11.5 in the three months to September. However, London was far worse hit with estate agents in the capital saying they sold an average of just eight properties between July and September, based on data from the Royal Institute of Chartered Surveyors (RICS).

One surveyor said nearly all the sales were of repossessed properties.

Overall, total mortgages, which also includes remortgaging and loans to existing homeowners, fell by 63 per cent to £6 billion during August. Loans to people moving house fell by 61 per cent in volume and 64 per cent in value.

While the number of loan for remortgaging fell by 20 per cent.

Both the CML and RICS welcomed yesterday’s move by the Government to bailout out leading UK banks.

But Michael Coogan, director general of the CML, said: "The package of measures announced yesterday will have a positive effect, but it will take time for it to feed through to the mortgage market."

House prices are also continuing to fall, according RICS.

Across the country, 84.2 per cent more chartered surveyors reported seeing further price slides during the month compared with those who saw price rises, compared with 81.8 per cent more who reported falls in August.

RICS said sellers had been forced to drop their asking prices, but despite this the percentage of their asking price that they achieved was continuing to fall.

Elsewhere in Britain, house sales are picking up despite falling prices The increase in demand was particularly marked in the South West, where 12 per cent more surveyors reported a rise than a fall in demand- the highest level since May 2007.

Estate agent Knight Frank had more bad news on the property market yesterday when it said it expected house prices to fall to the same levels of 2003 leaving more than two million people in negative equity.

Under the estate agent’s estimates average house prices would fall a further £45,000 to £185,625.

The Nationwide Building Society, Britain’s biggest independent mortgage lender, announced yesterday that it was raising rates and withdrawing deals for all but the most cash-rich buyers.

The lender said that it was increasing its rates by up to 0.61 percentage points and said that it would offer new deals only to borrowers who had a 15 per cent deposit.

http://business.timesonline.co.uk/tol/business/economics/article4940149.ece

UK house sales fall to less than one a week

UK house sales fall to less than one a week

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