Tonight:
4°c
Property experts say confidence is now at 30-year low
Jonathan Prynn, Consumer Affairs Editor13 May 2008
Confidence in the property market has plummeted to its lowest level since records began more than 30 years ago, according to figures published today.
The Royal Institute of Chartered Surveyors reported that 95 per cent more surveyors saw a fall in house prices in April than a rise, suggesting that values are dropping in virtually every part of the country. This is in contrast to the last property crash, which started in London and the South- East in 1989 but did not ripple out to the rest of the country until months or even years later. In its commentary on the market, Rics said: "Many would-be-buyers are either struggling to raise the necessary finance or are exercising caution in the light of current economic uncertainty.
"With the official interest rate cuts not being fully passed on to the high street, lenders continue to pull back on the range of mortgage products and further scale down loan-to-value ratios, and there is little expectation that demand will improve in the near term."
Rics also warned of the first signs of a big increase in properties going on to the market, particularly in London - an indicator that more over-stretched owners are being forced to sell.
Stephen Thornton, a spokesman for Rics, said: "When there is a big jump upwards in new instructions it can indicate forced sales - either repossessions or sales from those attempting to avoid the repossession process."
Last week government figures revealed a 17 per cent rise in the number of homeowners facing the prospect of having to sell their homes.
However, estate agents insisted that Britain was not on the brink of a house price collapse.
Peter Bolton King, chief executive of the National Association of Estate Agents, said: "The house price falls that are taking place are modest and the picture is still patchy, with some areas of the country finding it tougher than others. It is still important to remember that the underlying factors that support the property market remain - low unemployment, historically low interest rates and a pent-up demand for houses."
The Rics figures back up other indicators that show that the property market has ground to a halt with buyers unable or unwilling to commit to the market and owners who do not have to sell sitting tight until there is a recovery.
The number of sales completed by surveyors over the three months to the end of April was the lowest since 1997. The number of unsold properties on their books is at its highest level since 1998, and the number of sales as a proportion of unsold properties is now at a 12-year low.
Ian Perry, a spokesman for Rics, said: "The real issue is the collapse in the number of housing transactions, which has very real implications, not just for the property industry but also the high street and the wider economy. Sellers of white goods, for example, are likely to suffer if this low level of turnover persists for much longer."
Reader views (1)
Why are people still talking about the housing market being on the brink of a crash... It's already happening!
- Andy, London, 13/05/2008 14:21
Report abuse
