House sales will plummet 35% predicts the CML
House sales will be around 35% lower in 2008, compared with last year, according to forecasts from the Council of Mortgage Lenders
In its Housing and Mortgage Market Forecasts: 2008 report, which was published last week, the trade body says that it expects a similar fall in the number of mortgage approvals for house purchase. As a consequence of lower sales activity, it expects house prices to be 7% lower in Q4, compared with 2007.
Meanwhile, gross mortgage advances are expected to be around £285bn this year, down from £363bn last year, with net advances forecast to be around £55bn, compared with the £108bn underwritten in 2007.
The CML claims that this is the lowest level since 2001 and means that the value of outstanding mortgages will rise by 5% this year, compared with 10% in 2007. Nevertheless, Rightmove’s House Price Index for May reveals a 1.2% increase in average property asking prices in May, up to £242,500. This compares with £239,521 in April.
Miles Shipside, commercial director for Rightmove, says: “The free-flowing mortgage tap has been turned off. Sellers who are hanging out to achieve last year’s prices need to accept that the market has fallen and that they will end up being punished by a lower price in the long run.” Asking prices had experienced the highest rise in the South East of England (4.2%) and the biggest decreases in East Anglia and the East Midlands, both at -1.5%.