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Mortgage approvals and home sales hit new lows
Rashid Razaq11 Nov 2008
LONDON has seen the biggest fall in house sales for 30 years as figures today revealed the number of properties changing hands has hit a record low.
The capital's estate agents are selling only two properties a month on average, according to a Royal Institution of Chartered Surveyors (RICS) poll of its members.
The financial crisis, combined with worries over unemployment, have left the property market "virtually paralysed", experts have warned.
Nationally, property sales fell to an average of 10.9 per estate agent, down from 11.5 in September - the lowest level recorded since RICS's survey began in 1978, and lower than the property crash of the early Nineties.
The group said the shortage of mortgage finance continued to "stifle" the ability of buyers to access the market.
But surveyors are upbeat about the future, with more expecting sales levels to improve during the coming three months than those who think they will worsen. RICS said this optimism was being driven by an increasing trend for sellers to drop their asking prices.
RICS spokesman Ian Perry said: "Last week's interest rate cut should certainly help to support the market now that lenders have agreed to pass on the reduction to borrowers. Even so, the general lack of mortgage finance remains a major blockage in the housing market for a large majority of would-be buyers.
"Fortunately, many vendors have finally started to accept current market conditions and are dropping their asking prices to achieve a sale. Sales should increase in the coming months as more and more sellers understand that greater realism is the only way to make that long desired move."
Surveyors in the capital are optimistic that sales levels will pick up during the coming quarter, with 37per cent expecting a rise.
Britain's largest housebuilder, Taylor Wimpey Plc, today said its order book stood at 6,607 homes compared with 11,074 last year. It shows the increasing pressure that falling house prices and the soaring cost of debt is placing on home builders, the company said.
