Landlord News

House Sales Have Dropped

HM Revenue & Customs have carried out some research to reveal that the amount of houses sold last year fell by 1%.

In 2011 they calculated that 869,000 homes were sold. This was 11,000 fewer than the previous year. This is also one of the lowest amounts since modern records began in 1978. In 2006, around 1,669,000 homes changed hands.

Analysts have put the reduction down to strict mortgage lending, rising unemployment and falling incomes. Many of those who are first time buyers are also being locked out of the housing market due to high deposit demands.

Professor of Economics at the University of Reading, Geoff Meen, has been quoted saying: “If you have very poor levels of credit availability, for first-time buyers and people moving home, you are going to get low levels of sales taking place.”

He then went on to add: “You would expect low levels of transactions taking place in any recession as well. Given we have very low levels of new construction activity, new transactions reflect sales of new dwellings, so if you have got low starts and completions you are going to get low transactions as well.”

Adrian Coles, of the Building Society Association, has commented: “This is not just a cyclical downturn where we will see a recovery in a year or two – there are some fundamental changes that have occurred.”

Furthermore, the Councils of Mortgage Lenders (CML) predict that mortgage lending could fall back this year. In addition, the Bank of England expects mortgage lenders to further tighten lending criteria too, which will of course make it harder to get a mortgage.