Increase sales resulting from falling house prices
January 6, 2009
Over the past few months property sales levels in the UK have been plummeting, with tighter credit conditions and a range of other factors resulting in fewer and fewer people purchasing property. With property prices falling many people have been nervous to take the plunge and purchase a property in case house prices continue to fall leaving them quickly facing negative equity.
In addition to this many have been unable to get the finance that they need to get onto the property ladder because of increasingly tight credit conditions being brought in by banks. With a range of mortgage product having been taken off the shelves the lack of choice and affordability has also stopped many from getting onto the property ladder.
At one point recently the number of properties per week being sold on average per estate agent plunged to less than one, reflecting how profoundly the housing sector has been affected by the global credit crisis.
However, according to more recent industry reports property sales levels have started to creep up again, and officials have said that this is partly due to the fact that many sellers have now started being more realistic with regards to their selling prices, whereas previously many were refusing to budge and accept that the value of their homes had fallen.
An official from the National Association of Estate Agents stated: ‘Sellers are beginning to face up to the reality that their houses are not worth as much now as they were 12 months ago. They are ripping up last year’s price tags and beginning to come to terms with the new economic reality. That is a difficult thing to do - but the silver lining is that the market is now more transparent for buyers. Prices are becoming realistic, and we hope that this provides the boost needed to encourage those families who so desperately want to buy houses to get onto the market.’
Another official added: ‘Few people will take heart from the fact the latest lending figures are marginally up on September, as they are still massively lower than October last year. You have a double whammy where consumer confidence is shot to bits by a rapidly weakening economy and the mainstream lenders are only accepting ‘quality’ applicants with big deposits. I hate to say it but it could be some time before things start to improve.’
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