The UK’s housing market is still in the doldrums!

Posted by admin on 15 October, 2008 under Business news | Be the First to Comment

The Royal Institute of Chartered Surveyors (RICS) has reported that transactions fall further as price balance worsens with new buyer enquiries and newly agreed sales remain negative in September 2008.

The number of properties being sold across the UK was at its lowest level since the RICS survey began in 1978, as estate agents across the UK are selling on average just one home per week. The number of properties being sold presently is 52% lower than in September of last year.

Commercial property
As the economy slows tenant demand for commercial property has also declined. The RICS has indicated that since its started it’s surveys in 1998 the pace of decline in “tenant demand is at its fastest pace in the second quarter, as did enquiries to occupy commercial premises. Demand and enquiries were weakest in the retail sector and fell back to a lesser degree in the industrial and office markets, as the economic slowdown reduced business expansion.”

According to the Council of Mortgage Lenders (CML) we are also seeing that the number and value of home loans are at their lowest levels since current records began. In August there were 42,200 house purchase loans, of which 15,600 of them were to first-time buyers. House purchase lending was 63% lower than in August 2007 and the value of the loans in August 2008 was £6 billion.

“Fixed rates were higher than tracker rates and rose by more from July to August. Expectations of base rate reductions have also increased, so it is unsurprising to see consumers moving in favour of variable rates. The package of measures announced yesterday will have a positive effect, but it will take time for it to feed through to the mortgage market.” CML director general, Michael Coogan

Bellway profits are hit by the slowdown

Bellway has trimmed its workforce, as have other UK housebuilders, as they have reported a 30% drop in annual profits. Bellway Homes which is a Newcastle-based company says that orders are down by almost a 50%. Their profits before one-off items were £165.7m, which is down from £234.8m a year earlier, whilst orders were 49% lower at £342m. However, these figures do not include a £130.9m write-down in the value of its land stocks, so if this is included their profits fell to just £34.8m.

Bellway has said that the deterioration of the housing market and availability of mortgages had been “unprecedented”!

Job cuts

Bellway Homes sold 6,556 houses during the year to 31 July, which is down 14% over the same period last year with the average sale price dropping from £173,300 to £169,700. As a result of the slow down the company has cut its workforce by a stagering 35%!