House sales dropped again last month with surveyors reporting less than one sale a week because of a lack of mortgage finance for buyers, according to the RICS.
It said in its UK housing market survey for September published today that 84.2% more surveyors reported a fall than a rise in house prices - an increase from 81.8% in August.
It said the average number of transactions per surveyor over the last three months is now at 11.5, the lowest figure since the survey began in 1978.
London is the worst hit region with estate agents reporting only eight sales on average over the past three months.
Buyer inquiries up
However, buyer enquiries rose to the highest net balance for 16 months with 17% more surveyors reported a fall than a rise in new buyer enquires compared to 27% in August.
The RICS said sellers have been forced to drop asking prices to more realistic levels but ‘even so the gap between asking and selling prices continues to widen’.
The South West has shown the greatest increase in demand with a 12% of surveyors reporting a rise in new buyer enquiries, the highest figure in the region since May 2007.
New instructions to sell property stayed in negative territory with 14% more surveyors reporting a fall than a rise, a drop from 2% in August.
‘With the decline in house prices unlikely to abate in the near term and the likelihood of achieving a sale a distant memory, many are placing their property on the market for rent or sitting tight while the financial turmoil continues,’ it said.
‘The market has still yet to experience significant numbers of forced sales but surveyors are surprisingly optimistic that sales will increase over the next three months. For the first time since June 2007 the net balance of surveyors expecting sales to improve turned positive.’
RICS spokesperson Jeremy Leaf said: ‘The recent turmoil in the financial markets has dented confidence further but yesterday’s announcement by the Government that the re-capitalisation of banks will be accompanied by increased lending to home owners, raises the possibility that the lack of mortgage finance that has so damaged the housing market might be eased.
‘As it stands, only those with significant finances are in a position to access the market. The housing market continues to hold its breath and unless mortgage liquidity improves, the market is likely to remain a dormant beast for some time to come.’