UK home sales, in September 2008, fell to the lowest level in three decades. This is mainly due to the global economic crisis that has created lack of mortgage.
According to the Royal Institute of Chartered Surveyors, home sales in the UK fell in September 2008 to its lowest level in the past three decades, as reported by Bloomberg.
On an average, 11.5 homes were sold by surveyors and estate agents in the quarter from July to September 2008 that is 52% less as compared to the same period in 2007. It is also the lowest level recorded by the group ever since it started the survey in 1978.
Further, London recorded the worst home sales where real estate agents sold an average of 8.3 properties in the third quarter of 2008. In 2009, UK builders are likely to total less than 100,000 new housing units.
The slump in the UK’s housing industry is due to the financial crunch that has led to a decline of credits to the lowest point for almost a decade. Worldwide economic instability has also shattered the confidence of consumers and investors. In particular UK’s economic recession has adversely affected the housing industry.
Moreover, as weakening house prices and sluggish economy are gripping the incomes of UK consumers, they are forced to cut down their expenses. The uncertainty over stamp duty has pushed the housing industry further back.
The UK housing industry is expected to see additional recession in price in near future. In its efforts to ease out conditions, the Bank of England cut its interest rate by half a point to 4.5%. This is the biggest cut down since 2001. The European Central bank and the US Federal Reserve are also slashing their interest rates.
According to a Research Analyst at RNCOS, “The UK housing industry is declining due to adverse business and financial circumstances. The decreasing house prices in the country should have attracted more buyers, but the lack of home loans is containing the number of home buyers. But now, as banks are planning to bring their interest rates down, home loans will become easily available to Brits and then they may buy new homes.”
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