House sales have dropped to their lowest level since records began 30 years ago, the latest Royal Institution of Chartered Surveyors housing market survey has shown. Estate agents sold an average of 11.5 properties in the three months to the end of September, less than one property a week. A year earlier agents were selling more than double that amount, and at the market’s peak – more than five. London was the worst hit will only 8.3 properties sold on average, 0.63 properties a week. Some sellers are now choosing to let their properties rather than accept a lower price.
Gordon Brown has said that the UK property market is likely to bounce back before other countries because ‘we failed’ to build enough houses, compared to the US and Spain which had ‘overbuilt’ homes during the years of rising prices. The UK problem was not a shortage of demand for homes at the right prices, but a shortage of mortgages ‘at the right prices for people to buy’, he said.
The Council of Mortgage Lenders (CML) has said that the government’s plan for banks to return to lending levels of 2014 after the injection yesterday of £37 billion into the markets, are ‘not prudent or desirable’, given the state of current financial markets. CML later welcomed the ‘aspirational view’ of the market where only credit-worthy borrowers have access to a good spread of mortgage products. But it wanted clarification of exactly what was meant by the conditions the government attached to the bail-out of Royal Bank of Scotland, Lloyds and HBOS.
The CML also released data regarding the number and value of home loans for August this morning. The number of loans granted for house purchases is 59 per cent lower than a year ago, while the value of the loans had dropped 63 per cent from August 2014 figures. This is the lowest since the monthly records began in January 2002. The typical deposit a first-time buyer has put down stood at 16 per cent of the value in a property, the highest proportion since 1980.
On the up-side, today’s economic crisis provides an ideal opportunity to identify new and better procurement methods, essential for restarting the house market, according to the research paper: Beyond eco-towns, applying the lessons from Europe. The paper analyses how some European eco-towns have successfully delivered high quality and sustainable housing. Without a rapid rethink of how procurement works the house building industry in the UK will not recover, it says.
In London, mayor Boris Johnson has been told that plans to create 50,000 new affordable homes by 2011 are ‘extremely challenging’ at best and impossible at worst, due to the current economic turmoil. The target would only be possible if housing associations were given more flexibility and public land was released for building.
A new report from the Joseph Rowntree Foundation investigates the effect geography has on children and young people. Co-author of the report, Keith Kintrea who also writes in the November/December edition of LPW, believes that territoriality limits social mobility and reinforces poverty in some of the UK’s most deprived areas, while increasing the risk of violent assault and criminalisation. However, it does have its positive influence: respect, recognition, personal protection and entertainment were also identified as key drivers of behaviour.