House sales activity hits record low

The RICS has reported the lowest amount of activity in the UK housing market since its records began 30 years ago.

Figures released today show that the average number of transactions per surveyor in the past three months was just 12.7, as a lack of mortgage finance continued to stifle buyers' ability to access the market.

This is the lowest figure since the RICS' housing market survey began in 1978, with some chartered surveyors at estate agents reporting fewer than one sale per week.

The proportion of surveyors reporting a rise in new buyer enquiries fell slightly, with 28% more seeing a fall than a rise, compared with 27% in July.

In June and July, surveyors reported that many sellers had dropped asking prices to more realistic levels and that predatory buyers were waiting to pounce on bargains, but in the traditionally weak month of August this interest stagnated.

The RICS house price balance improved slightly for the fourth consecutive month but still remains at a significantly low level - 81% more surveyors reported a fall than a rise in house prices, a decrease from 83% in July.

However, the latest repossession figures still remain well below the levels seen in the early 1990s.

A RICS spokesperson said: “A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery. While money is scarce, many will continue to be denied the next step on the property ladder.

“The government's stamp duty policy will not be enough kick-start transactions and is more likely to assist buy-to-let investors with better access to finance than the first-time buyers it was aimed at. More needs to be done to reinvigorate a market whose confidence has taken a severe knock.

“In the absence of much transactional activity many homeowners are being forced to rent their properties while they wait for lending criteria to be loosened and demand to pick up.”