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UK house sales 'at 30-year low'

The number of UK home sales has fallen to at least a 30-year low over
the past three months, the Royal Institution of Chartered Surveyors
(RICS) has said.

Average completed sales per RICS member fell to 10.9 between August and
October, the lowest level since the body first compiled the data in
1978.

The RICS blamed a lack of available mortgages "stifling" the market.

However, the worst may now be over, as RICS said 20% of its members now
expect sales to rise by the end of the year.

This compares with just 4% who said in September that they saw sales
rising.

Falling prices

RICS said the growing optimism that sales would start to increase again
was being driven by more sellers agreeing to drop their asking price.

Many vendors have finally started to accept current market
conditions and are dropping their asking prices to achieve a sale
RICS spokesperson Ian Perry

Yet it also added that it may also reflect expectations of an increase
in the number of homes being repossessed.

Regarding house prices specifically, RICS said 84% of its members saw
prices fall between August and October, while 14% said prices were
level, and 2% saw a rise.

Lack of mortgages

RICS spokesperson Ian Perry said last week's decision by the Bank of
England to cut interest rates to 3% from 4.5% would help to boost sales.

"Even so the general lack of mortgage finance remains a major blockage
in the housing market for a large majority of would-be buyers," he said.

"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."

UK housebuilder Taylor Wimpey said on Tuesday that it believed there
would be no short-term recovery in the UK housing market.

The company welcomed last week's rate cut, and said it was hopeful that
if it was quickly passed on to consumers it would help the market to
return to stability more quickly.

"Increased mortgage availability and a return of customer confidence
remain the key requirements for a sustained market recovery," Taylor
Wimpey said.

Regional differences

RICS found that London had seen the biggest fall in sales, with members
reporting an average of just 6.4 sales over the three months.

Sales were strongest in the North East of England, where each member
completed 16 transactions.

Britain's biggest building society, the Nationwide, said on Monday that
it expects house prices to continue to fall in 2009/10.

Story from BBC NEWS:
http://news. bbc.co.uk/ go/pr/fr/ -/1/hi/business/ 7720886.stm

Published: 2008/11/11 08:45:43 GMT