A monthly report from the Bank of England shows that over 40% of house sales in the UK are collapsing in some areas.
[UKPRwire, Sat Jul 26 2008] A monthly report from the Bank of England shows that over 40% of house sales in the UK are collapsing in some areas. This is due to buyers backing out or failing to get a mortgage, yet more evidence of the impact of the credit crunch on the housing market as people struggle to raise the finance they need.
Only 100,000 properties were sold in June, a 37% drop from May. House prices in London were the worst hit, with prices falling by 1.4% in May alone, the biggest monthly fall in the capital for three years.
With the availability of mortgages at a record low – 49% down in the last year – many potential buyers are having to withdraw from deals after having their mortgage offer withdrawn by the lender. Many others are pulling out of buying because they’re afraid house prices will fall even further, amid some predictions of as much as a 35% drop in prices in the next two years. Others are finding that many sellers simply are unwilling to accept a lower offer.
These problems are further exacerbated by difficult conditions throughout the housing chain, for example buyers being forced to cancel their offer because the buyer of their own home has had to back out.
Figures released by the property website Rightmove show that there are 15 properties on the market for every one successful buyer. The trend is confirmed by data from the Royal Institution of Chartered Surveyors (RICS), which shows that the number of transactions has slumped to a 30-year low, a trend they expect to worsen in the coming months.
In sharp contrast, the rental market has improved as a result of the difficulties in the buying market. The estate agent Your Move has reported a 38% increase in demand for rented accommodation in the past year, so for landlords the situation is working in their favour.
But for would-be buyers and sellers of properties the situation is very grim and almost certain to get worse. Sellers do have another option, however, if they are willing to slightly lower their asking price. Lawrence Smith of Decision Homebuyers said, “For owners who urgently need to sell in order to close a deal on another property, they might want to consider a secure and guaranteed sale to a property-buying company rather than risk the volatility and uncertainty of finding a buyer on the open market.”
For press enquiries, please contact Phil Rendall on 020 7099 9026
Email: phil@dhbuyers.co.uk
Web: www.decisionhomebuyers.co.uk
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Decision Homebuyers carries out daily surveys of the national media to provide up-to-date news and commentary on the UK property market.
