House sales volumes hit new low

House sales fell further in October as lack of mortgage finance continued to stifle the property market, according to new data from the RICS.

In its housing market survey for October, the body said that the average number of completed sales per surveyor fell to 10.9 over the past three months, the lowest level since the survey started in 1978.

London was the worst performer, with an average of just 6.4 sales per surveyor - less than half the figure in the West Midlands, where surveyors had 15.3 sales on average. In Wales and East Anglia the figure was nine sales, while the North-east fared better with 16.

There were some signs of improvement, however. The balance of surveyors reporting a fall rather than a rise in house prices fell to 81.8%, from 84.5% in September.

Net balances for new buyer enquiries and newly agreed sales also improved for the sixth consecutive month, suggesting that the drop in activity slowed in the second and third quarters.

And surveyors are increasingly optimistic that business will improve in the next three months, with expectations rising to their highest level since March 2007.

RICS spokesman Ian Perry said that last week's interest rate cut should help the ailing market but that the lack of liquidity remained a problem.

He said: “The general lack of mortgage finance remains a major blockage in the housing market for a large majority of would-be buyers. Fortunately, many vendors have finally started to accept current market conditions and are dropping their asking prices to achieve a sale.

“Sales should increase in the coming months as more and more sellers understand that greater realism is the only way to make that long desired move.”