The UK property market has taken a dive as August saw the lowest total homes sold per estate agent for more than two years.
According to a recent survey, the level of sales has dipped to new lows with the general state of the economy continuing to be a large influencing factor.
Economic gloom has taken its toll on the housing markets as only 14 homes were sold per estate agent in the three months to August. The last time such a situation occurred was June 2009.
The Royal Institution of Chartered Surveyors (RICS) found that 70% of surveyors questioned felt that the lack of mortgage financing was due to a negative impact on transactions, with many homes now falling into negative equity.
The RICS reported that ënew buyerí enquires, which signals buyer demand, fell by 3% in August.
Alan Collett, spokesperson for the RICS, said; ìFor the time being, our indicators suggest that demand for homes remain broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.î
However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.”
The number of first time buyers struggling to get onto the property ladder adds to this slump in housing sales.
Banks are tighter with their funds since the recession and require larger deposits, which many first time buyers struggle to attain.
With wage freezes and redundancies within the job sector looming, and the impact of high inflation upon the cost of living combined with a low base rate for savers, first time buyers are almost pushed out of the ownership market.
The UK housing market has experienced the lowest rate in home ownership since the 1920s. A report published by the National Housing Federation (NHF) revealed how there is a ìchronic undersupply of new homesî in the UK.
Furthermore, they predict that over the next decade, home ownership will fall to just 63.8%.
Compare mortgages with MoneyExpert