House prices are falling and more drops are expected in the coming months
Published ¤ 14/08/2012 09:37:29
The difficulties housebuyers are facing to obtain mortgages are weighing on the property market, experts warned today.
House prices are falling and more drops are expected in the coming months, according to the Royal Institution of Chartered Surveyors.
And one of the main reasons is the lack of availability of home loans at reasonable rates.
Peter Bolton King, RICS global residential director, said: "Despite the terrible weather seen in many parts of the county last month, a steady number of potential buyers still got out there to test the market.
"However, this didn't result in a higher level of actual transactions.
"Fewer sellers are putting their homes up for sale and the ongoing problem of accessing affordable finance is not helping. If vendors want to sell their homes quickly, they will have to be realistic in their price expectations."
A balance of 24% more surveyors reported falling rather than rising prices last month, the most negative reading since June 2011, RICS said.
London, which has had strong interest from overseas buyers, is the only region where more surveyors reported price rises than falls.
The West and East Midlands and Yorkshire and Humberside were the areas where surveyors were the most likely to report prices falling.
Figures from the Council of Mortgage Lenders yesterday showed that while first-time buyer numbers hit the highest level for two years in June, the number climbing onto the property ladder was stuck at less than half the 30-year average.
While the number of new homeowners has continued its slow climb from the record lows seen three years ago, many are still being squeezed out by the sizeable deposits needed to access the best mortgage rates.
A total of 19,200 mortgages for first-time buyer purchases completed in June, according to the CML, the highest number seen since July 2010 – once the distortion caused by March’s removal of a new homeowner stamp duty break up to £250,000 is stripped out.
RICS said the start of the school holidays meant activity in the market tailed off further, with the number of new sellers coming to market declining for the third month in a row, while demand from buyers remained broadly flat despite the wet weather.
But the study found marked regional differences, with the North and North West regions seeing demand from buyers generally rising over the last four months in a row, while demand has either been unchanged or dropped off elsewhere.
Some 15.1 sales per surveyor were recorded over a three month period, the lowest figure seen since October last year.
RICS said that the the difficulties many buyers are having in getting a mortgage has contributed to the drop in transactions.
Sales are expected to pick up slightly in the next few months, but both prices and sales figures are likely to show a deterioration in the next year, the study found.
Paul Skinner of PKS, mortgage and insurance brokers in Odiham, Hampshire, said "In this market it is essential that house sellers obtain professional advice. Too many estate agents still just want to make as much money as possible, without thinking about how to make their customers houses sell quicker.
"At PKS we not only offer independent mortgage advice, but we will help people looking to seel their homes. Just simple tips like making sure the house is tidy when people come to view it, or making sure the gardens are kept neat and tidy. If people are prepared to pay, we will send in some interior designers to prepare the property for sale. This oftens helps the property to sell in a fraction of the time."
If you are thinking of selling your house, call PKS for FREE advice.
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