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March 25, 2008

Credit squeeze hits UK property market with house-buyer numbers at record low

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by Kay Mitchell

Credit squeeze hits UK property market with house-buyer numbers at record low

Figures from the National Association of Estate Agents (NAEA) show that the credit squeeze is having an impact on the UK property market with house-buyer numbers at a record low.

The NAEA established that the number of house-buyers on estate agents’ books fell 12% in February, to 243 per agent from 276 in January. This represented the lowest figure in its monthly housing market survey to date.

Furthermore, the gap between asking prices and what properties actually sold for continued to widen to stand at 4.5%.

According to the NAEA, external pressures such as the credit crunch and squeeze on mortgage approvals, was making buyers wary and causing the property market to slow.

Furthermore, lenders have been reassessing risk, reducing their product ranges, increase their mortgage prices and reduced their lending capacity.

Stewart Lilly of the NAEA said invariably, the global credit crunch, especially the US situation, has had a knock-on effect, which together with consumer inflation, is placing continuing pressure onto the property market.

We continue to call on the Bank of England to lower interest rates to help prevent the economy slumping and to help bring back a renewed sense of optimism for the consumers, added Mr Lilly.

The number of homes on the market last fell nearly 11% to an average of 74 per estate agent as potential sellers were in ‘wait and see’ mode.

The survey from the NAEA follows news that property website Rightmove.co.uk said sellers need a ’reality check‘ when pricing their homes for sale, as unsold stock reaches record highs.


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