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Urgent help needed for ‘chaotic’ UK property market

The latest published figures from the Royal Institute of Chartered Surveyors shows that transactions per surveyor fell to a record low in December despite buyer interest remaining strong.

The RICS UK housing market survey shows that the average number of transactions per agency over the last three months is now at 10.1, a drop from 10.6 in November, and the lowest figure since the survey began in 1978.

'The Government must act now to ensure that order is restored to the current chaos. Buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market is at a standstill and transaction levels at an all time low. First-time buyers and owner-occupiers are now stuck in a market which does not fulfill their aspirations,' said RICS spokesperson Ian Perry.

'A first step would be to for the Government to provide guarantees for the new issuance of residential mortgage backed securities. Without this help there is a real danger that homebuyers will be frozen out of the market, transaction levels and prices will fall to new lows, repossessions will increase and negative equity will become common place. Together this has the potential to push the country deeper into recession,' he added.

The survey paints a depressing picture throughout the country. Chartered Surveyors in London report only seven sales per agency over the last three months and surveyors in the South East and South West report only nine sales in the same period.

Last month, the most buoyant region was the East Midlands with 15 sales per surveyor. 'It is noteworthy, however, that the sales to stock ratio – an indicator of market slack and a key guide of future price changes – has fallen to a record low after a period of stabilisation. In December, it dropped from 13.6% percent to 12.9%,' the report says.

However, interest in the market continues to remain upbeat with 17% more Chartered Surveyors reported a rise than a fall in new buyer enquiries up from 16% in November.

As house prices fall, those with finance continue to look for bargain opportunities. Interest is strongest in the South West and East Anglia while the balance in London turned positive for the first time since 2006. The rise in interest reflects both the drop in asking prices and recent cuts in interest rates

Some 3% more Chartered Surveyors reported a rise than a fall in new instructions to sell property up from a zero net balance in November. Supply is starting to loosen in most regions but remains tight in London and the East Midlands.