House sales slump to 30 year low

The Royal Institution of Chartered Surveyors (Rics) has published a report showing that during each of the months of March, April and May, the average estate agency sold 17.4 homes.

The figure represents a 32% decline on the same period of 2007 and leaves house-sellers in England and Wales struggling to achieve sales in the most hostile housing market in 30 years.

According to the data, 84% of estate agents surveyed reported that prices have dropped over the last three months and Rics members see the UK’s mortgage famine as central to the declining market.

Rising interest rates and tougher lending criteria have made it more difficult and more expensive to raise funds for a home move or first purchase.

The report states that prices will fall sharply if there is a surge in homeowners being forced to sell their properties and Rics spokesman, Jeremy Leaf, warns of the dangers to the wider economy of a house price crash.

While estate agents and other sectors directly related to the housing market might be the first to take up the impact of the declining market, housing transactions are the source of consumer demand for household goods and services.

Meanwhile, estate agents are predicting that the profession will see 15,000 job losses this year.

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