Duncan Lewis

Residential Property

Commercial Property

RICS predict housing market will not pick up until deposits for first time buyers are lowered

Date: (10 July 2012)    |    

Total Comments: (0)    |    Add Comments

According to a poll by the Royal Institution of Chartered Surveyors (RICS), activity of housing market was at its weakest readings in June, for new buyer enquiries and new instructions for more than a year and a half.
It revealed that some more surveyors had reported price falls rather than rises in June, compared to the previous month. It was the weakest reading since October.
The next 12 months the prices would keep its negative trend, although the volume of transactions was expected to remain broadly flat.
After the stamp duty holiday for first time buyers came to an end in March the market has been hit, offsetting the introduction of the Government-backed NewBuy scheme designed to encourage the return of 95% mortgages.
RICS chief economist Simon Rubinsohn warned activity levels were not likely to significantly pick up until lenders demand smaller deposits from first-time buyers and offer lower interest rates to borrowers with small deposits.
He said the housing market remained in doldrums last month with no positive signs.
Although there was some positive note with amount of sales going to see an increase, it was unlikely that there would be any real movement until purchasing a property was more affordable and accessible for the likes of first-time buyers.
The survey came despite housebuilders having enjoyed a rise in sales and profits in recent months, with Bovis Homes today reporting an 18% jump in completions to 944 in the first six months of 2012.
But like many housebuilders, its gains have mainly come through focusing on building larger family homes in the south of England by reducing its focus to first-time buyers struggling to clamber on to the ladder.
The housing market has struggled since a stamp duty holiday for first-time buyers was withdrawn at the end of March, and as confidence was hit by the weakening economy and the ongoing eurozone debt crisis.
London, which has had strong demand from overseas buyers, was the only area where more surveyors reported price increases rather than decreases, continuing an ongoing trend.
The South East reported the smallest falls out of the rest of the country, which RICS said reinforced the notion of a north-south price divide across England.
The West Midlands and East Midlands suffered the most negative price balances.