House sales fall to record 30-year low

HOUSING sales in the UK have reached a 30-year low, according to new research by the Royal Institution of Chartered Surveyors (RICS).

The country's main surveyors organisation revealed its findings as it called on the UK Government to take "significant and decisive action" to help revive the flagging market.

The RICS report came a week after the Nationwide said house prices fell 10.5 per cent in August compared with the same month last year.

And it follows the news that the number of homes being sold in Edinburgh dropped by more than a quarter compared to the same time last year, with only 3008 residential properties sold between April and June.

The government is working on a package of measures to help the housing market but, in a stinging report, the RICS said government efforts to cope with the housing slump had been limited, and listed its own set of suggested reforms.

The institution called on the Government to help increase the number of available mortgages, by allowing the Bank of England to guarantee the issue of new mortgage-backed securities, which could be parcelled up and sold on to other investors.

The Bank of England currently guarantees existing mortgage securities, and the RICS said extending this to new mortgage investments would give a much-needed boost.

The RICS also called for the establishment of tax-free saving schemes, making it easier for first-time buyers to save for a deposit.

And it also wants to see stamp duty removed from the house-buying process in the short-term, with a new lower rate introduced over a longer period once the market is back on its feet.

Among other recommendations was the creation of a government-backed mortgage rescue scheme, which would allow occupiers in financial trouble to continue to live in their property.

The RICS would also like to see regulatory reform making it easier for social landlords to develop and rent affordable homes, as well as reduced VAT on repair and maintenance costs.

RICS director of external affairs Gillian Charlesworth said: "The market needs decisive government action on a range of fronts if it is to pull itself out of the doldrums and we call on government to listen to the market's solutions to a whole set of problems.

"We know there is no silver bullet that will slay this monster, but we need a joined-up, comprehensive approach to bring back confidence and to give the public clarity about what is available. While we wait for the government to act on all the necessary fronts, many homeowners are trapped in a market offering little or no mobility without any prospect of good cheer in the autumn."

Professor Charles Goodhart has said the present housing crash could be worse than that seen in the early 1990s.