As we all know moving house is getting tougher and tougher but now it appears that activity in the housing market is slowly collapsing as it is now down by two fifths over the last five years.
The Royal Institution of Chartered Surveyors (RICS) conducted a report and found that during the three months up to May there were only 15 completed sales for each surveyor, compared to the same time in 2007, which saw completed sales at an average of 25 per surveyor. This is a 40 percent decrease which the RICS believe is due to the banks reluctance to offer loans.
“Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market,” says Peter Bolton King from RICS.
This also affects landlords because for many of us having a mortgage is the only way we can own a property with or without a tenant contributing to monthly bills. With not many affordable mortgage packages avaliable this will make it hard for landlords to expand their portfolios and increase their profits.
‘Wait and See’
Mark Harris who is the manager at SPF Private Clients, a mortgage broker, has said, “The number of transactions has slumped as wider economic uncertainty means buyers and sellers alike adopt a ‘wait and see’ approach.”
“The difficulty in getting credit unless you have a substantial deposit, squeaky clean credit history and meet lenders’ stringent requirements, means even those who do want to buy may struggle.”
As well as the banks reluctance, another issue is that properties aren’t selling as fast as they used to. This is because buyers can’t afford sky high prices and sellers can’t afford to sell their property for peanuts. This means everyone is waiting for the right price which often takes a long time. Especially now when the cost of just moving property is close to £7000 before other additional costs such and as a good property insurance quote.
Some surveyors have been warning sellers that they need to be more realistic in what they want to get for their homes as prices are gradually becoming lower and lower. If prices are lower, this should increase sales.
Mr Bolton King said, “A gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across more parts of the country.”