Royal Institution of Chartered Surveyors (RICS)
Nearly 60% of surveyors are now reporting that the gap between asking and selling price of houses is narrowing, according to new RICS research. In contrast, last August results of the same survey revealed that the gap was widening.
Across the UK, houses are selling at an average of 11% below the asking price with sellers in some regions being forced to accept as much as 26% discount off their advertised price.
The north still seems to be the worst affected region where vendors are accepting offers, on average, at only 74% of asking prices. However, 63% of surveyors in that region did report that the gap between asking price and selling price was narrowing. Results in the North West have improved slightly, although the region is still looking weak, with vendors accepting offers at 84% of asking price - this stood at 82% last August. Consistent with the fact that the 'new buyer enquires' and 'price expectations' balance are strongest in London, vendors are now achieving sales at around 93% of asking price, with 55% of surveyors reporting that the gap had narrowed over the previous three months. As in August 2008, Scotland appears to be the least affected region with vendors achieving sales at 97% of asking price with 75% of surveyors reporting that the gap between asking and selling prices has narrowed in the last three months.
Charted Institute of Housing Conference
A leading economist has predicted it will be another two years at least before repossessions reach their peak, and the outlook for the UK's economy remains 'hideous' for the next decade.
Speaking at the Chartered Institute of Housing's Annual Conference, UK and USA economic expert, Ian Shepherdson, predicts that repossessions will reach between 100,000 and 120,000 per year by 2011, as the levels of unemployment increase and incomes become squeezed. Repossession levels in 2008 stood at 40,000.
It was a double-whammy of bad news for families, as Mr Shepherdson highlighted the collapse of bank lending to the ailing construction industry. Investment by banks has dropped to virtually zero from annual levels of around £6 billion per year. All of this is contributing to a huge decline in house building with some estimates indicating more than a 50% drop in the number of new homes being built this year compared to 2008.
Mr Shepherdson's gloomy outlook for the economy was also echoed by Nationwide Building Society's chief economist, Martin Gahbauer, who indicated that the current drop in house prices only made property more affordable if interest rates stayed low and people had a deposit.
