Buyers lining up, says RICS, but loans are out of reach

Published 10th Feb 2009

Increased interest from bargain-hunters failed to boost the housing market last month, as the number of sales fell to a record low of just three properties per estate agent.

The Royal Institution of Chartered Surveyors (RICS) said that interest from potential buyers increased in January for the third consecutive month. However, the average number of sales fell to 9.9 per agent in the three months to the end of January, down from 10.0 in the three months to December and the lowest figure since the survey began in 1978.

Surveyors blamed the continuing mortgage drought for preventing keen buyers from taking advantage of lower prices. Discounts worth up to 50 per cent in some parts of the country have piqued buyers' curiosity, while some surveyors are reporting that poor returns on savings are encouraging those who sold months ago to come out of rented accommodation.

Robert Bartlett, chief executive of Chesterton Humberts, the estate agents, said: “It is clear that the property market has already taken a substantially harder hit than any index has yet shown and many buyers now perceive better value. Faced with an alternative of negative savings returns (after tax and inflation) elsewhere, property is now beginning to look like a much more interesting longer term investment again.”

However, economists said that, while there had been an increase in viewings, this translated to a sale only when buyers had a big deposit. Borrowers with smaller deposits face mortgage rates of more than 6 per cent, if a lender agrees to accept them in the first place.

RICS said: “The latest survey provides further evidence of the eagerness of buyers to try to pick up bargains. This interest has yet to translate into sales but transactions may pick up in the coming months if the Government follows through on its recent announcement and introduces guarantees for the issuance of residential mortgage-backed securities.”

RICS said tha the fall in available housing stock stock had not yet had the effect of increasing prices, it contributed to the first rise in the sales-to-stock ratio — a key indicator of future price changes — since September 2007.

Source: ' Times '

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