Home sellers are being forced to accept offers on average 9% below their asking price, said the Royal Institution of Chartered Surveyors (Rics).

The gap between asking and selling price is widening as the property market downturn worsens, Rics added.

Property prices have fallen by 11% in the past year, according to major lenders, while sales have fallen by more than half.

The available evidence suggests that prices and sales will fall further.

“With housing transactions currently at a 30-year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up,” said Simon Rubinsohn, RICS chief economist.

“The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible, he added.

Big gaps

The smallest gap between asking and selling price was in Scotland where house prices are still rising.

But in the North of England, the discount between asking and selling price was the largest, at 12.5%.

Those vendors in Wales, the West Midlands and East Midlands, and the North West were accepting offers, on average, 10% below their asking price.

And the gap was smaller in London, at just 8.5%.

Rics said this was because London’s economy was more diverse, with a large jobs market, giving sellers “more room for optimism” about the price they could hope to achieve when selling a house or flat.

However Mr Rubinsohn warned this could change.

“The London market could be adversely affected as employment in the financial sector drops off,” he said.

One wealthy home-owner is throwing in his Lamborghini to get a quick sale

News reported by The BBC

The slump in the UK property market continued in August, with some estate agents selling fewer than one home per week in the past three months.

The Royal Institution of Chartered Surveyors (Rics) said sales were at their lowest level since its monthly survey started in 1978.

It said the fall in prices slowed, for the fourth month in a row, but they were still much lower than a year ago.

Rics said the continued shortage of mortgage funds was “stifling” buyers.

Mortgage famine

“A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery,” said Rics spokesperson Jeremy Leaf.

“While money is scarce, many will continue to be denied the next step on the property ladder.

“The Government’s stamp duty policy will not be enough kick start transactions,” he warned.

Meanwhile, the head of the Nationwide Building Society told the BBC that he expected house prices to fall by 25% from their peak last autumn.

Graham Beale also said he does not expect to see signs of recovery in the housing market until 2010.

The weakness in the housing market is being exacerbated by the sharp slowdown in the UK economy.

Unemployment is rising, growth is falling, and retail sales are weak – with the British Retail Consortium reporting that sales have been flat throughout the summer.

The past 12 months have seen an unprecedented collapse in home sales and prices since the property market, both here and in the US, was struck by the credit crunch in the financial markets.

Ripples from the crisis have spread throughout the world, with house prices falling sharply in many other European countries.

According to Rics, the average estate agent in the UK sold just 12.7 properties in the three months to the end of August.

That meant sales were running at levels 47% lower than in August last year.

And with the market normally quiet in August anyway, estate agents have seen interest even from predatory buyers “stagnate”.

The only glimmer of optimism in the Rics report was that the number of estate agents reporting a rise in new instructions was only slightly outnumbered by those reporting a fall.

However the number of new enquiries from potential new buyers fell again, and at a faster pace than in July, suggesting that the market may stagnate further in coming months.

“Falls in enquiries took place across all regions in England and Wales,” Rics said.

Cheaper mortgages?

The cost of borrowing has in fact been coming down in the past couple of months for some new borrowers, especially those who can afford to put down a deposit of at least 25%.

Banks and other lenders have found it cheaper than before to raise mortgage funds on the wholesale financial markets and have been passing this on to their most favoured customers.

Of the 12 largest mortgage lenders in the UK, 10 have cut the cost of their two or three-year fixed rate deals in the past two weeks.

The latest example came from HSBC, which yesterday cut the cost of all its fixed rate mortgages by between 0.46% and 0.72%.

News reported by The BBC

The government needs to take “significant and decisive action” to help kick start the housing market, the main surveyors’ organisation has said.

The call from the Royal Institution of Chartered Surveyors (RICS) came as it said its research showed that housing sales were now at a 30-year low.

Claiming that government efforts had so far been limited, RICS has come up with its own set of suggested reforms.

The government is working on a package of measures to help the housing market.

No-one from the Department of Communities and Local Government was immediately available to comment on RICS’ recommendations.

The RICS report comes a week after the Nationwide said house prices fell 10.5% in August compared with the same month last year.

More mortgages

RICS is calling on the government to first help increase the number of available mortgages.

“The market needs decisive government action on a range of fronts if it is to pull itself out of the doldrums” Gillian Charlesworth RICS director of external affairs

To do this, RICS wants the government to allow the Bank of England to guarantee the issue of new mortgage-backed securities – home loans which are parcelled up and sold on to other investors.

RICS says such a move would help increase the number of new mortgage offers available.

The Bank of England currently does guarantee existing mortgage securities, under the Special Liquidity Scheme, but RICS wants it extended to new mortgage investments.

RICS also calls for the establishment of tax-free saving schemes to allow first-time buyers to more easily save for a deposit on their first property.

Among other recommendations, it wants to see is a short-term holiday on stamp duty, followed by a new lower rate.

RICS also called for government-backed mortgage rescue schemes to allow the current occupiers to continue to live in their property.

No silver bullet

“The market needs decisive government action on a range of fronts if it is to pull itself out of the doldrums and we call on government to listen to the market’s solutions to a whole set of problems,” said RICS director of external affairs Gillian Charlesworth.

“We know there is no silver bullet that will slay this monster, but we need a joined-up, comprehensive approach to bring back confidence and to give the public clarity about what is available.

“While we wait for the government to act on all the necessary fronts, many home owners are trapped in a market offering little or no mobility without any prospect of good cheer in the autumn.”

RICS also calls for regulatory reform to make it easier for social landlords to develop and rent affordable homes, and reduced VAT (Value Added Tax) on repair and maintenance costs.

It further wants to see changes to the Home Information Pack to make it less costly.

The Conservatives described the RICS proposals as “serious options” which the government should consider.

The Liberal Democrats last week called for the introduction of a mortgage rescue scheme, which would allow families struggling with repayments to sell all or part of their house to a housing association or private firm and then stay in the property as tenants.

News reported by The BBC

The number of people instructing letting agents to rent out their homes rose at a record pace during the second quarter of 2008, as increasing numbers of would-be property sellers struggled to offload their home at a reasonable price.

According to the Royal Institution of Chartered Surveyors’ (Rics) quarterly residential letting survey, published today, the number of new instructions received by letting agents increased at the fastest pace in the survey’s 10-year history, providing the evidence that increasing numbers of homeowners are deciding they would rather rent out their property than sell it at a knock-down price.

Some 43 per cent of chartered surveyors reported a rise in instructions over the quarter, up from 30 per cent during the first three months of the year.

“The lettings market is booming, with many vendors opting to rent their property while sales in the housing market continue to dry up,” said James Scott-Lee, a spokesman for Rics. “Many are willing to ‘hold’ and await the return of capital appreciation. Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns.

“Established investors have been reaping the benefits of the housing downturn for some time and will continue to do so in the short term. However, ever-increasing supply could have an impact on rental growth as tenant options increase.”

Property prices have fallen by almost 10 per cent over the past year, and much faster in some areas of the country, as the number of buyers has fallen sharply. Meanwhile, rents have been slowly increasing in most regions, improving prospects for amateur landlords.

However, the growth in the number of new landlords will put further strain on the buy-to-let mortgage sector, which is already struggling to meet demand. Bradford and Bingley and Paragon, the sector’s two largest lenders, have pulled back from writing any significant volume of new business in recent months, creating a glut of supply. According to Moneysupermarket.com, the financial comparison site, the number of buy-to-let mortgage products on offer has fallen from more than 4,300 to just over 300 over the past year, meaning only those with excellent credit records and a significant amount of equity in their homes are being accepted for new loans.

David Hollingworth of London & Country, the fee-free mortgage adviser, said homeowners need to think carefully before deciding to become an amateur landlord. “This is a drastic measure, and will usually result in taking on a much greater level of mortgage debt than originally planned at a time when credit is more expensive and not as freely available.”

“Borrowers need to fully understand the costs and risks that come with being a landlord before putting additional stress on their finances. Both properties are likely to be subject to larger mortgages, and payments need to be met whether there are tenants in place or not.”

The growing number of new amateur landlords has created a two-speed market, with many amateur buy-to-let investors now trying to exit the market in response to the collapse in prices.

Thousands who bought properties over the past few years are still struggling to generate enough rent to pay their mortgages – and are now facing even higher borrowing costs when they come to refinance. While they had hoped a continued rise in capital values would help them to achieve a profit, the collapse in the market has encouraged many to sell.

Meanwhile, the number of landlords defaulting on their mortgages has risen sharply over the past few months, and Bradford & Bingley has predicted that the market may only get worse during the second half of the year.

News reported by The Independent

The high street chains taking on their landlords’ rental policies could benefit from sharply falling demand for commercial property, particularly in the retail sector.

Sixteen big name retailers are joining together to put pressure on their landlords to accept rent on a monthly basis, rather than in advance every quarter, to ease the impact of slowing consumer spending. Campaigners include Carphone Warehouse, BHS and Boots, and targets include both property companies and pension funds. “Everything else is getting squeezed,” one major retailer told The Independent. “In the light of all that is going on, it is time for the landlords to come to the party.”

But commercial landlords are already feeling the pinch, the latest survey from the Royal Institute of Chartered Surveyors (Rics) will say today.

The balance of surveyors rep-orting a fall rather than a rise in demand was -50 per cent during the three months to the end of June, down from -32 per cent in the previous quarter and +12 per cent in the same per-iod last year.

Although falls were recorded across all three main comm-ercial property sectors – ind-ustrial, retail and offices – it was the high street that saw the biggest drop. The balance of surveyors reporting demand for retail space fell as low as -80 per cent in the west of England, and -89 per cent in the north-west.

Notably for the retailers’ rental campaign, Rics says that the increasing bargaining power of business tenants has sent the value of inducements rising at the fastest rate since the survey began. Meanwhile, average lease lengths are shortening, with the steepest declines taking place in the retail sector.

But there is also a rare ray of light from the beleaguered high street today. The British Retail Consortium’s figures for June show central London sales up 8.7 per cent, year on year – the fastest growth since February – although nationally sales were down 0.4 per cent.

The capital’s West End also saw footfall up 6.6 per cent year on year, against a national average of a 1 per cent decline, according to the New West End Company.

News reported by The Independent

Demand for commercial property has fallen to its lowest level in more than a decade, intensifying pressure on landlords who are facing demands to rip up rental agreements in the tough economic climate.

The Royal Institution of Chartered Surveyors says on Monday that the outlook for commercial property has not been worse since it started its survey a decade ago, with weaker retail sales, frozen expansion plans among the big banks and plentiful office space.

The Rics survey measures the gap between the proportion of its members reporting a fall in demand for commercial property and a rise. That gap between pessimistic and optimistic surveyors now stands at 50 per cent, compared with 31 per cent in the first quarter.

Confidence in the retail sector has been hit hardest, with 64 per cent more surveyors reporting a fall than a rise in demand.

The findings will add momentum to a new consortium of retailers, including Sir Philip Green’s Arcadia, which is this week expected to appoint a “rents champion” to lead a campaign against landlords.

The group wants to scrap quarterly payments in favour of monthly rents, a move that could save £145m a year, according to the British Retail Consortium, which has been campaigning on the issue since 2006.

The move will not be welcomed by commercial landlords, including most listed property companies and pension funds, which have seen more than 20 per cent wiped off the value of many properties during a 12-month cyclical downturn.

Many landlords are open to negotiations on leases but one said on Sunday it was unlikely that contracts would be rewritten.

News reported by The IndependentNews reported by The FT

The number of people moving house is at its lowest level since surveyors started collecting records in 1978.

There were 15.3 transactions per surveyor during the three months to the end of June, the Royal Institution of Chartered Surveyors (Rics) said.

Rics said that demand from buyers remained low with many of them unable to get mortgages.

But the number of surveyors reporting house price falls was not quite as high in June as it had been in May.

Rics spokesman Jeremy Leaf said that there were opportunities for some would-be buyers when the market was weak.

“With demand so low, would-be buyers are negotiating from a position of strength,” said Mr Leaf.

“Even in a weak market there are always opportunities for investors and buyers to profit and some are starting to circle for bargains.”

‘Regional gloom’

There were 88% more surveyors reporting a fall than a rise in house prices in June, falling from 92.2% in May.

But surveyors in the West Midlands held a unanimous view that prices were falling.

With people still finding it difficult to secure mortgage deals, some 35% more surveyors reported a fall in inquiries from buyers than a rise in June.

Some surveyors reported that some buy-to-let investors were entering the market to take advantage of rising rent levels.

So-called “predatory buyers” were also stalking the market for big reductions during the depressed market conditions.

The report suggested there was little sign of repossessed homes being sold in large numbers because employment levels remained strong.

‘Rents to rise’

The survey comes the day after a report for the Association of Residential Letting Agents said rents in the private rented sector would rise significantly in the short term.

In the report, Professor Michael Ball, of Reading University, predicted that rents would rise by 10% to 15% in both 2008 and 2009.

Young people were delaying the age at which they bought their first home and this was taking some potential buyers out of the market, the report said.

Younger people were less likely to buy and, as a result, were less likely to fall into the spiral of negative equity that prolonged the housing market recession of the 1990s, it added.

House price surveys by lenders in recent days suggested that house prices continued to drop in June.

The Halifax said property prices fell by 2% in June, whereas rival Nationwide said prices dropped by 0.9% on average during the same month.

A spokesman for the Department of Communities and Local Government said the issues affecting the housing market were “global” and very different to the 1990s.

“We want to continue to ensure stability and fairness in the housing market,” he said.

“The long-term demand for housing remains high and the fundamentals of the economy are sound with low unemployment and historically low interest rates.”

News reported by BBC