Rics Reveal House Sales Down 40%

House sales have plummeted by almost 40% since the peak of the boom five years ago, according the Royal Institution of Chartered Surveyors (Rics).

Rics have blamed the “stagnant” market of the reluctance of many banks to offer people affordable mortgages.

However they added that they expect sales to pick up over the summer.

Lenders have been tightening their borrowing criteria amid the weak economy and the ongoing eurozone crisis, with several putting up their rates for both new borrowers and more than a million existing ones.

There were 51,823 approvals for house purchase in April worth £7.6bn, a 1.5% increase on March, but still below the previous six-month average, according to recent Bank of England figures. The figures have been creeping up after a seven-month low in February, just before a two-year stamp duty holiday for first-time buyers ended the following month.

A balance of 9% more surveyors in the RICS survey expect to see a rise in transactions in the coming months, although this does not mean prices will also increase.

"Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market,” Rics housing spokesman, Peter Bolton King, said.

"In spite of this, a gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across most parts of the country."

(H)