Monday 19th May 2008
The Royal Institution of Chartered Surveyors (Rics) has predicted a 40 per cent drop in house sales in the coming months.
According to the organisation, the number of properties being sold is to fall by "at least" that figure over the course of the year.
Valuations, meanwhile, are expected to drop by five per cent over the coming 12 months.
The predictions are made as part of the May housing market forecast published by Rics.
In the forecast, Rics states: "It is hard to ignore the sheer weight of negative news stories surrounding the residential property market at this point in time.
"Access to mortgage products is being restricted, the level of transactions has plunged and prices do now appear to be slipping whichever index one looks at."
Rics adds that it anticipated the credit crunch when, in September 2007, it predicted zero house price growth for 2008.
But it now anticipates that the tightened market conditions are likely to emerge as "a little more protracted" than more optimistic market assessments may have envisaged.
However, the organisation notes that headline figures are likely to become increasingly alarmist as market commentators attempt to "outdo each other".
This could see greater and greater statistics appear in the media when forecasting the market for the next one to two years.
Existing homeowners may draw some comfort from Rics observation that the number of new sales instructions remains relatively low.
Such a trend indicates that there are few transactions being driven by affordability concerns - termed "distressed sales" - at present.
Rics spokesperson Ian Perry recently noted that the poor supply of houses for sale is more significant than the modest property price falls recorded in recent months.
He said: "The real issue is the collapse in the number of housing transactions.
"This has very real implications, not just for the property industry but also the high street and the wider economy."
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