2011 Sees UK House Sales 11% Down
According to the HM Revenue & Customs, UK house sales had fallen by 11% last year to 869,000 which is one of the lowest totals on record.
This means that unfortunately the UK property market has so far reached a three-year slump, with sales half the levels recorded in the run up to the 2007 banking crisis.
Due to a combination of mortgage rationing by lenders and rising employment, sales have been depressed.
2009 saw an all-time record low of house sales, with just 848,000 homes being sold. It was the fewest house sales since 1978 when modern records began.
Professor of Economics at the University of Reading, Geoff Meen, said the fall reflected several factors.
“If you have very poor levels of credit availability, for first-time buyers and people moving home, you are going to get low levels of sales taking place. You would expect low levels of transactions taking place in any recession as well.”
He added “Given we have very low levels of new construction activity, new transactions reflect sales of new dwellings, so if you have got low starts and completions you are going to get low transactions as well.”
The CML (Council of Mortgage Lenders) are predicting that this year will see a drop again in lending to both buyers and people who want to remortgage their homes, which could cause sales to fall further.
New rules devised by the Financial Services Authority (FSA) will be introduced in 2013, to stop lenders reverting to lending habits of the recent past.
The FSA will ban mortgages where the loan is greater than the value of the property, and will also stop loans to people who cannot prove they have sufficiently large incomes to repay their home loans.
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