Bleak news from surveyors last month. The RICS Housing Market Survey revealed that 78.5% more surveyors reported a fall rather than a rise in house prices in March – the highest who have done so since the survey began in 1978.

It beats the historical high of 64.5% reported in June 1990 in the middle of the last recession.

The reason for this doom and gloom is, as has been well reported in the national press, the unwillingness of banks and building societies to lend money. Most lenders require bigger deposits, and some have withdrawn previously agreed offers of mortgages. Additionally, would-be buyers are being more cautious.

Does this mean we are in for a huge drop in house prices? The RICS doesn’t think so. Spokesman Jeremy Leaf said: ‘Until new supply increases dramatically a significant crash remains unlikely. The next six months will be a crucial period for homeowners.’

There was more doom-mongering from Plimsoll Publishing, which has drawn up a report into the UK’s top 2,000 construction companies and how likely they are to survive a recession. Plimsoll claims that a third of the companies are reporting declining sales, over half have seen their margins fall, and a third need more short-term finance which shows that costs are running ahead of cash flow.

The only good news is for smaller companies. Plimsoll says that small businesses that concentrate on local and domestic markets are less exposed to the slow down.

Source

Construction Manager