Home sales hit 30 year low

The RICS house price balance improved slightly for the fourth consecutive month but still remains at a significantly low level. 81.0 percent more Chartered Surveyors reported a fall than a rise in house prices, a decrease from 83.1 percent in July.

The continued inability of many to secure mortgage finance is reflected in the collapse in transactions. The average number of transactions per surveyor (over the last three months) is now at 12.7, the lowest figure since the survey began with some Chartered Surveyor estate agents in a number of regions reporting less than 1 sale per week.

Demand remained weak in August. The balance of surveyors reporting new buyer enquiries fell slightly with 28 percent more Chartered Surveyors seeing a fall than a rise compared to 27 percent in July. In June and July, surveyors reported that many sellers had dropped asking prices to more realistic levels and that predatory buyers were waiting to pounce on bargains, but the traditionally weak month of August has seen this interest stagnate.

New instructions to sell property edged closer to positive territory with 2 percent more Chartered Surveyors reporting a fall than a rise, up from 3 percent in June. The latest repossession figures still remain well below the levels seen in the early 1990's and the Government's rescue package may have alleviated some of the trauma associated with this process.

Commenting, RICS spokesperson Jeremy Leaf said: "A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery. While money is scarce, many will continue to be denied the next step on the property ladder. The Government's stamp duty policy will not be enough kick start transactions and is more likely to assist buy-to-let investors with better access to finance than the first-time buyers it was aimed at. More needs to be done to reinvigorate a market whose confidence has taken a severe knock.

"In the absence of much transactional activity many home owners are being forced to rent their properties while they wait for lending criteria to be loosened and demand to pick up."