New data from Royal Institution of Chartered Surveyors (RICS) has shown that house prices have fallen to a 30-year low over the last 3 month period and the number of surveys fell to the lowest since it began in 1978, with sales declining from 11.5 to 10.9.
RICS believe it is the lack of >available mortgages which is overwhelming the market. However, they believe that sales would start to rise again now that more sellers are assenting to drop their asking price.
And with the Bank of England slashing interest rates by 1.5% , bringing borrowing costs down to 3%, there have been some serious efforts to avoid a deep recession and hopefully these actions will help to enhance sales.
However, Britain’s largest bank, the Nationwide, believe that house prices will continue to fall over the next few years.
Here we agree with the latter, and despite the drop in interest rates, believe a recovery in the housing market is still a long way off, with the inevitable repossessions and falling house prices to beyond 30%, eventually fueling a recovering economy in 2011, just one year prior to the London Olympics.