UK homes for sale halved with serious effects on the economy

October 23, 2008 by OPPE News

The current slowdown in the number of completed UK homes sales is now having a serious effect on the economy, an agents’ group has warned.

The Royal Institution of Chartered Surveyors (RICS) reacted to September statistics from HM Revenue and Customs (HMRC) showing sales were more than 50 per cent down on the level one year ago.

The group warned the phenomenon was now hitting consumer spending and jobs, while saying the housing market could be “close to hitting a floor”.

Figures released earlier this week by HMRC show only 59,000 homes for sale worth more than £40,000 changed hands in September.

RICS said:

“There are some signals that housing market activity could be close to hitting a floor but there is a danger that a sharp rise in unemployment could precipitate a further round of fear on the part of buyers.”

The group also said it expected the Bank of England to lower the base interest rate again when it next meets in November.

Earlier this month RICS warned the costs of mortgages would have to decrease in order for the UK property market to show signs of improvement.

RICS senior economist Oliver Gilmartin has also said the slowing economy could also see more people defaulting on their mortgages.