Toughest time in three decades for property sellers
By admin • Sep 23rd, 2008 • Category: Featured, Mortgages
There is little doubt that the housing market is going through some real challenges in the UK at the moment. Homes are losing value hand over fist, with prices going down on a monthly basis, and mortgage lending has become extremely restricted, which means that refinancing on a home or getting a mortgage to purchase a property has become very difficult for some people and nigh on impossible for others.
It is little wonder, therefore, that industry officials have reported that house sellers in the UK are now facing their toughest challenge in three decades, as the housing and mortgage slump continued to gather pace. This is the claim made in a recent report from the Royal Institute of Chartered Surveyors. According to RICS the problems that sellers face in selling their properties are reflected in the bleak figures from the estate agent industry.
The figures show that in March, April, and May, the average number of homes sold per estate agent was just over seventeen, which was a marked reduction of 32% from the same months in 2007. RICS began its monthly reports in 1978, thirty years ago, and claims that these figures are the lowest on record, thus concluding that homeowners are now facing their toughest challenge in thirty years when it comes to selling their home.
The RICS report went on to state that a huge 84% of estate agents said that they had seen the value of property fall over the last three months. It is also claimed that whilst it was previously thought that some regions of England and Wales has escaped the house price falls, this was not in fact the case. In the East Midlands, which is known to be the worse hit area, house prices have been falling for seventeen months in a row.
However, the blame for the housing crisis is being shifted from one industry group to another. For example, estate agencies have blamed the problem with low house sales on lenders, stating that the dramatic cut back in mortgages and the tightening of credit conditions has led to fewer people being able to buy purchases, resulting in fewer properties being sold.
However, another cause for the drop in sales could be more to do with predictions that house prices are going to continue falling. Many first time buyers who are keen to get onto the property ladder may not be experiencing problems getting a mortgage – although many undoubtedly are. Instead, it could simply be that they want to hold out and see how low property prices will fall rather than take the plunge and then see the value of the property fall, potentially plunging them into negative equity very quickly.
One estate agent recently stated: ‘Everybody is sitting on their hands. They either cannot get a mortgage or they can get the financing but think they will get the same home for a much lower price if they wait for a few months.’
