Property market is still stagnant, surveyors say

Image caption,
Home sales are still running at roughly 40% of the levels recorded in 2007 before the banking crisis

Houses are taking longer to sell because of the stagnation of the property market, surveyors say.

Estate agent members of the Royal Institution of Chartered Surveyors (Rics) sold only 23% of the homes on their books in the three months to May.

Back in the same period of 2007, they had sold 41% of their homes for sale.

Rics said property sales were continuing to be depressed by the reluctance of banks to lend to many potential home buyers.

Despite this, there is some evidence that activity in the market has picked up gently.

In the first four months of this year the number of mortgages approved for house buyers, but not yet lent, was 12% higher than in the same period last year.

The number of completed sales was also higher, by 13%.

However, this may turn out to have been a short-term burst of activity, prompted by a small number of extra first-time home buyers moving to take advantage of the government's stamp duty concession before it expired on 24 March.

"Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market," said Rics spokesman Peter Bolton King.

"In spite of this, a gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across most parts of the country."

The Halifax bank recently predicted that house prices would be little changed by the end of the year, after reporting that in May they were almost exactly the same as a year ago.

The Nationwide building society has reported a similar picture, pointing out that is has only been the dearth of new homes being built that has been keeping prices up.

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