House sales at lowest level since 1978

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by Kay Murchie

The latest figures from the Royal Institution of Chartered Surveyors (Rics) have revealed that property sales are at a 30-year low and less than one home per week is being sold by estate agents.

The organisation established that average completed sales per Rics member had fallen to 10.9 between August and October - the lowest level since it began collecting data in 1978.

Rics said the mortgage squeeze continues to have a devastating affect on the housing market.

According to the Council of Mortgage Lenders (CML), there were 34,900 home loans approved for purchase in September, down 14% compared with August and down 57% compared with the September 2007.

It is increasingly difficult to obtain a mortgage without a hefty deposit since the credit crunch has meant lenders are only willing to lend to those with an excellent credit rating or a large amount of equity in their properties.

Michael Coogan of the CML said despite banks and building societies having limited funds available, they do want to support homeowners but are taking a prudent approach to risk.

Rics spokesperson Ian Perry believes that last week’s 1.5% cut in interest rates should go some way to improving sales. Rics believe that the worst may now be over as one fifth of its members expect sales to rise by the end of the year.

Meanwhile, the housing market continues to struggle as last week, the Halifax revealed a 2.2% fall in property prices in October. This takes the annual rate of fall to 13.7% over the past year and according to the lender, the latest fall takes the average home to £168,176, almost £30,000 less than a year ago.

Yesterday, the Nationwide, Britain’s largest building society, said it expects house prices to continue falling into next year and possibly 2010.

Nationwide’s chief executive, Graham Beale, is expecting a peak to trough decline of 25%.