The housing market has become “stagnant” after activity has collapsed by two-fifths in the last five years, a report published today reveals.
The Royal Institution of Chartered Surveyors (RICS) said just over 15 completed sales were made per surveyor in the three months to May.
That’s a 40 per cent fall on the 25 sales made over the same period in 2007.
RICS blamed the conditions on “banks’ reluctance” to offer loans.
Peter Bolton King, of RICS said: “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.”
Mark Harris, boss of mortgage broker SPF Private Clients, 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.”
RICS said part of the problem is that homes are now taking considerably longer to sell.
In the three months to May, estate agents sold less than a quarter of the homes on their books.
In March to May 2007 – when the market was at its peak – they shifted 40.9 per cent of homes.
There was gloomy news on prices too as sixteen per cent more surveyors reported falls rather than rises last month.
The general mood among surveyors across the country is downbeat.
Mark Hunter of Doncaster-based Grice & Hunter warned: “The current market is now likely to be the norm for the forseeable future.”
David McKillop of McKillop and Gregory in Salisbury said: “The outlook is not very happy.”
Some surveyors warned that sellers need to be more realistic in the prices they hoped to achieve for their homes.
Andrew Oulsnam of Robert Oulsnam in Birmingham said: “Vendors still have unrealistic expectations on price.”
“Managing expectations is key in the current market,” agreed Derek Coates of Venmores in Liverpool. “It is still the case that a realistically-priced property will find a buyer.”
Realistic lower prices may lead to a boost in sales, said Mr Bolton King.
“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.”
That positive process is likely to be helped by continued low interest rates, according to Mr Harris. “'The fact that interest rates are likely to remain low for some time will support the market to an extent.”