House sales fall despite increased buyer interest

The Royal Institution of Chartered Surveyors (Rics) has published the results of its December survey, showing a continued fall in the number of homes sold, despite a rise in buyer inquiries.

In the final quarter of 2008 Rics members sold an average 10.1 properties per estate agency, compared with 10.6 during the previous three months and the organisation says it expects transactions to continue to decline until the UK’s mortgage market is revived and lending levels increased.

New buyer inquiries rose for the second consecutive month during December, with potential purchasers drawn back to the market by falling prices and interest rate cuts.

According to Rics spokesman, Ian Perry, buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market remains moribund.

Mr Perry joins the Council of Mortgage Lenders and others in calling on the Government to implement the recommendations of the Crosby Review and provide guarantees for the mortgage backed securities that can generate funds for new lending.

He warns that failure to back the market in this way could result in further price falls, increased repossessions, a rise in negative equity levels and ultimately, a deeper recession.

Finally, the survey shows that the number of surveyors reporting price falls fell slightly during December: 73.5% more Rics members reported a fall rather than a rise in prices, with the ratio in favour of house price falls at its lowest level since February of last year.

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