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Dark cloud hangs over housing market

Dark cloud hangs over housing market

Category: Mortgages

Updated: 11/07/2012
First Published: 10/07/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Demand and interest from buyers remained low during June, reflecting a subdued property market.

According to the latest housing market survey by the Royal Institution of Chartered Surveyors, newly agreed house sales have slowed for the past three consecutive months since the stamp duty holiday ended in March. Demand from buyers has stalled following a rush to take advantage of not paying 1% tax on properties valued over £125,000.

House prices also fell last month, with 22% more surveyors reporting property price falls as opposed to increases. The news will be disheartening to sellers who are struggling to achieve a decent price for their home whilst trying to avoid the spectre of negative equity.

A low level of activity in the buyer's market, particularly from first-time buyers, is also believed to be because of continued low mortgage approval rates. Mortgage lenders remain wary as to whom they lend to, with many applications being rejected due to the slightest black mark on credit histories.

"The housing market did not manage to turn a corner last month and activity remained in the doldrums," said Simon Rubinsohn, RICS chief economist.

"Although there is some positivity that the amount of sales going through is going to see an increase, it is unlikely that we will see any real movement until purchasing a property is more affordable and accessible for the likes of first-time buyers."

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