Wolsey: Housing transaction levels fall to dangerously low levels

Permalink: Wolsey: Housing transaction levels fall to dangerously low levels
by Kay Murchie

According to Wolsey Securities, the housebuilder finance specialist, housing transaction levels in the UK have fallen to dangerously low levels and are set to fall 60% below the worst period of the early 1990s.

According to Mike Ratcliffe, chief executive of Wolsey, action must be taken immediately by the Government and waiting until after the summer while the stamp duty debate continues, will have a devastating impact on the economy.

The housing industry cannot withstand this level of trade and housebuilders will collapse if an improvement isn’t forthcoming, added Mr Ratcliffe.

Transactions are continue to fall because prospective buyers are finding it hard to secure funding as the mortgage drought continues. Furthermore, the continued fall in house prices is discouraging buyers from the market as they are waiting to see what happens.

Housebuilders have suffered as a result of the housing slowdown and thousands of construction jobs have been lost.

Last week, housebuilder Bellway reported a 45% fall in reservations of its homes in the second half of the financial year, compared with the same period last year.

Bellway added that completed sales had dropped by 14% compared with last year as the mortgage squeeze meant that prospective buyers were unable to secure funding.

Recent figures from Moneyfacts.co.uk have revealed that there are now 71% fewer mortgages available compared with this time last year.

There are now 3,748 mortgage deals available compared with 13,027 mortgage products last August, according to Moneyfacts, showing what an impact the credit crunch has had on the housing market.

Wolsey has based its figures from those from the Bank of England who have been showing a steady decline in mortgage advances since the start of 2008.

In related news, Business intelligence company, Datamonitor, believes that the UK mortgage market will shrink by a fifth by the end of the year.

Datamonitor is forecasting that that mortgage lending will continue to fall, by a total of 19.3% this year and by a further 3% next year.