UK Housing Market - Worst in 30
The Independent and The Royal Institute
of Chartered Surveyors certainly think so!
Thanks to falling property prices and continued restrictions
imposed by mortgage lenders on home loan finance, confidence in
Britain's housing market is at its lowest level since 1978.
The Royal Institute of Chartered Surveyors (Rics) says that
95 per cent of its surveyors reported a fall in house
prices in April.
In areas like East Anglia, the North and North-west of
England, not a single surveyor reported house price increases.
Even in Scotland, where the housing market has been more robust
until recently, more and more surveyors are now reporting house
Britain's property market may deteriorate much further if
the widely predicted economic problems were to cause an
increase in the number of homeowners to face repossessions.
People facing financial hardships will try to offload their
properties at much reduced prices, causing much more
significant price falls overall.
In fact this trend may already have begun. In London
surveyors are reporting a big jump in the number of properties
coming on their books indicating that these may well be forced
sales – either repossessions or sales from those attempting to
avoid the repossession process, according to RICS.
However some estate agents reckon that the current house
price falls are modest and the picture is still patchy, with
some areas of the country finding it tougher than others. Areas
with low unemployment and other weak economic indicators may be
more prone to sharp falls than others.
However RICS does not think so. In its recent report, the
number of sales completed by surveyors over the three months to
the end of April was the lowest since 1997. The number of
unsold properties on their books is at its highest level since
1998, and the number of sales as a proportion of unsold
properties is now at a 12-year low.
These findings are also in line with the most recent
warnings by Halifax Bank and Nationwide Building Society, the
country's two biggest mortgage lenders.
Economists are warning that the house prices are likely to
fall further this year and the next as in coming months.
Economic uncertainty has already made people to spend less on
discretionary items as the cost of mortgages rise, as well as
the fuel and food prices have risen in recent months. This will
almost certainly have wider economic implications.
Are experts correct that we are heading for a crash in house
prices? Only time will tell. However there is no denying the
fact that that the house prices have defied gravity in the last
May be it is time for a correction!
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Extract of this article has been taken from The Independent
(13 May 2008)
Research report link