Articles | Housing market breaks more records

House sales at record low

Published: Tuesday, 10 June 2008, 1:52PM

The number of homes changing hands has fallen to a record low as potential buyers continue to stay away from the market.

The Royal Institution of Chartered Surveyors (RICS) said estate agents sold an average of just 17.4 properties each during the three months to the end of May, the lowest figure since it began collecting data in 1978.

Potential buyers have become increasingly reluctant to commit to property purchases in recent months due to negative press reports of falling house prices and problems in the mortgage market.

The news comes amid reports tens of thousands of people who took out 100 per cent mortgages could face negative equity, which is when the asset is worth less than the balance of the loan.

Data from the Council of Mortgage Lenders shows that more than 23,200 people who took out 100 per cent mortgages in the year to 31 March are affected.

But the RICS figures did offer some brighter news, with a slight decrease in the number of surveyors reporting house price falls for the first time in 10 months.

Around 93 per cent more surveyors said house prices had fallen during May, compared with those who thought they had risen, a slight improvement from the record 94.7 per cent more who reported falls in April.

There was also a small improvement in the number of surveyors who reported a drop in buyer inquiries.

New buyer inquiries dropped for the 18th month in a row, but the proportion of surveyors reporting falls eased to 51 per cent more than those who saw a rise, compared with 69 per cent more in April.

The number of people putting their home up for sale fell for the fifth month in a row, with 26 per cent more surveyors seeing a drop off in new instructions than those who saw a rise, the second lowest figure since the question was first asked in 1999.

But the group said the lack of new instructions for property sales was providing the market with some support.