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Spring bounce can't save property market with house sales 40% down on five years ago

Published 12th Jun 2012

A property freeze has pushed out this year’s spring bounce, with new figures showing house sales have dived 40 per cent compared to five years ago.

Agents sold less than four homes a week in May, despite this traditionally being one of their better months, according to the latest RICS housing market survey.

Sellers are being forced to accept lower prices and properties are sitting on the shelf for longer, RICS said, with an average of 15.6 sales recorded by its member surveyor estate agents last month.

That is almost 40 per cent down on the 25.4 recorded in May 2007, the spring before the credit crunch hit, by the report considered a barometer of property market activity.

In the three months to May, agents sold less than a quarter of the homes they had on offer, shifting just 23.1 per cent of properties on their books compared to 40.9 per cent in the same period on 2007.

Peter Bolton King, RICS housing spokesperson, said: ‘It’s no surprise to see such a sizable drop in transactions since the market peak back in 2007.

‘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.

‘In spite of this, 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 most parts of the country.’

RICS said that prices continued to fall last month as 16 per cent more respondents reported falls rather than rises in prices. House prices have now been falling on this measure since June 2010.

However, surveyors remained optimistic that lower prices will eventually bring more sales, with 9 per cent more forecasting a rise rather than fall in transactions over the next three months.

Looking ahead, chartered surveyors expect transaction levels to see a slight upturn over the coming three months, with a net balance +9 percent more respondents predicting rises, while expectations for future prices remain squarely in negative territory.

Once more London was the only region to see prices rising, while the picture was bleakest for home sellers in the West Midlands, where almost 50 per cent more reported prices falling than rising.

Homes put up for sale and the level of new buyer interest were similar to April, as respondents reported flat net balances of -3 percent and -1 percent respectively.

Source: ' ThisIsMoney '

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