The UK housing market is experiencing its worst slump in 30 years, according to figures released by the Royal Institution of Chartered Surveyors (RICS). The April survey showed that 95.1% more chartered surveyors reported a fall than a rise in house prices, the ninth successive month in which such falls have been reported, and up from 79.4% in March.
[UKPRwire, Wed May 14 2008] The UK housing market is experiencing its worst slump in 30 years, according to figures released by the Royal Institution of Chartered Surveyors (RICS). The April survey showed that 95.1% more chartered surveyors reported a fall than a rise in house prices, the ninth successive month in which such falls have been reported, and up from 79.4% in March.
This represents the worst house price ratio since records began in 1978, and the survey shows that the housing market slump is even more widespread than during the crash of the early 1990s. House price falls are occurring across the whole country, with an even bleaker picture in some regions, such as East Anglia, the North and the Northwest, where 100% of surveyors are reporting falls. Even in Scotland, which until now was the only region where surveyors were reporting slight price increases, the net balance has turned negative.
Furthermore, the number of completed housing transactions “is falling off a cliff”, according to RICS chief economist Simon Rubinsohn, as vendors are reluctant to put their houses on the market as long as prices continue to fall.
However, the scale of house price falls remained relatively small in comparison to past slumps, and the tight supply is propping up the market and staving off any huge decline or crash. The fact that the market is not being flooded with large numbers of distress sales – either from repossessions or from those trying to avoid repossession – indicates that most homeowners are able to afford their mortgages, in contrast to the crash in the 1990s which saw record defaults.
Demand also continued to weaken, the survey showed, with 68% more chartered surveyors reporting a fall than a rise in new buyer enquiries, up from 51% in January. This reflects the difficulties faced by potential buyers in raising the necessary finance, as well as their reluctance to commit in the current climate of economic uncertainty. Given that official interest rate cuts are not being fully passed on to consumers, and that more and more mortgage products are being withdrawn by lenders, it is unlikely that demand will rise in the near term.
A RICS spokesman said the collapse in the number of housing transactions is a more worrying issue than the modest fall in prices, with serious implications not just for the housing market but for the high street and the economy at large. Around 4,000 estate agents have already lost their jobs, while sales of white goods, furniture and other household products are likely to fall sharply.
The news also saw a drop in sterling against the dollar as well as the euro.
For press enquiries, please contact Phil Rendall on 020 7099 9026
Email: phil@dhbuyers.co.uk
Web: www.decisionhomebuyers.co.uk
News provided by Decision Homebuyers, a leading UK property company offering a quick and simple solution for selling your home, no matter what the condition.
Decision Homebuyers carries out daily surveys of the national media to provide up-to-date news and commentary on the UK property market.
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