Housing market still in bad state say house builders

August 9, 2008

Over recent months the housing market has been going through turmoil, and the sale of properties has plummeted. This is because credit conditions have become much tighter, and this has resulted in fewer people being able to get a mortgage. It has also been made worse by falling house prices, as many would be buyers are nervous about taking the plunge at the moment because they fear house prices could fall further after they have purchased the property.

This trend has really affected house builders and a number of major house builders have had to cut their workforces dramatically, with some losing around 40% of their staff members.

An official from the house building firm Redrow said: ‘It remains difficult to assess how long the sharp reduction in sales activity will continue or the extent to which house prices will be affected. However, we expect the difficult markets we are confronting may persist for some time.’

He went on to say: ‘The housing market continues to be severely affected by the credit squeeze. Homebuyer confidence is now also being influenced by concerns about the future for house prices and interest rates. As a result, the market for both new and second-hand homes has declined rapidly to transaction levels not experienced for very many years with the price of homes now declining.’

An official from Bovis Homes said: ‘The backdrop to the market is pretty awful. The volumes have been affected by that backdrop, which has largely been caused by the turmoil in the financial markets, and the inability to get a mortgage has been a massive constraint on the consumer.’

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