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Auction sales will increase
Properties are still proving hard to sell for estate agents as they struggle to complete on average only 10 properties in a 12 week period.
A survey from the Royal Institution of Chartered Surveyors (RICS) found that some estate agents in London have struggled to sell one property a fortnight. This is the lowest figure recorded since their records began in 1978.
The number of repossessions is expected to increase by 50 per cent during 2008 and reach 45,000. The cut in the interest rate by 1.5% will hopefully encourage buyers back in to the market, many of whom will be hoping to pick up a bargain. Sales have been falling since lenders reduced their mortgage products and added increasingly prohibitive lending criteria to their shrinking stable of mortgage deals.
A spokesman for the RICS said that “Distressed sales are becoming a factor. People have to sell their homes because they can not afford their mortgage or for other financial reasons and they are getting real about the price they can achieve.”
Nationwide Building Society released figures to show that its mortgage lending had fallen by 70 per cent over the past 6 months. The society’s net lending fell from £3.6billion to £1billion in the six months to September, its mortgage market share has dropped from 6.2 per cent to 5.6 per cent. Graham Beale, the Nationwide’s chief executive, forecast that property prices would continue to fall further than the current 15 per cent in the past year alone. Some economists predict that prices will fall by 35 per cent in total before climbing.
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