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Housing market falls further as first time buyers shut out

9th November 2010

Banks and building societies inability to offer affordable mortgages to people trying to get on the property ladder was causing the housing market to slide substantially, according to the influential monthly survey from the Royal Institution of Chartered Surveyors.

Estate agents and surveyors were at their most gloomy since April 2009, with far more people reporting that house prices had fallen over the previous three months than had risen. In total the "balance" in October was -49, down from -36 back in September.

They also complained that how banks and building societies – heeding Government warnings to build up their balance sheets – still insisted on very large deposits and strict credit checks from first time buyers.

Ian Briggs a fellow of RICS at Dacre, Son & Hartley in Ilkley, said: "The collapse in mortgage lending has resulted in an essentially cash market. Quite why the government seems content to permit the lenders to effectively exclude an entire generation from property ownership remains a mystery."

David Boyden of Boydens, in Frinton-on-Sea, Essex, said starkly: "I Have not seen a first-time buyer for six months."

David Jones, of Jones & Redfearn in Rhyl, said: "Until the banks start lending sensibly the market will remain sluggish. First time buyers can't buy if they can't borrow and it they're not buying the market can't recover.

"This is not 'rocket science' it's 'pocket science'. Get the money out of the bankers pockets and into mortgages. Sadly, talk from politicians is cheap but mortgages aren't."

The Council of Mortgage Lenders has warned that the number of first time buyers being shut out of the market meant that home owners were increasingly older, with home ownership in decline.

Last week it said: “Since 2003, we have seen the first significant decline in home-ownership. And in the coming years, the benefits of owner-occupation – and the wealth it delivers – will increasingly be concentrated in the hands of those in their 40s, 50s and 60s.”

The RICS survey also said there was a fall in the number of potential house buyers walking in through the doors of estate agents, as well as a drop in the number of people tyring to sell their property, raising fears that the market was drying up as it did during the crash of 2008.

Chris Highton of Allied Surveyors Scotland in Selkirk, said: "It is now clear that the usual upturn after the summer holidays is not happening this year. The number of properties going to the market has dropped off significantly and the bottom end of the market remains dire, with very few first time buyers able to obtain mortgage funds."


Source:  Telegraph 9/11/10