Property markets hits 30-year low

Confidence in the UK housing market has reached its lowest point for 30 years, a survey by the Royal Institution of Chartered Surveyors claims.

The report revealed that 78.5% of surveyors saw a fall in house prices in March; the most depressing tally since records began in 1978.

The implications of a property market slump go far beyond homeowners, with thousands of jobs in the property, removals, surveying, estate agent and home furnishings business dependent on the sector.

"Many would-be buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in the light of current economic uncertainty," the Royal Institution of Chartered Surveyors said.

"Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight," added the body's spokesman Jeremy Leaf.

But he added that an outright crash was still unlikely and pointed out that those with sizeable deposits were now able to get hold of houses they would previously have been unable to afford.

Many would-be buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in the light of current economic uncertainty

In a separate survey, the Council of Mortgage Lenders revealed that the number of mortgages being issued has hit its lowest point for 16 years.

Loans for house purchases - as opposed to commercial property - made up just 30% of all lending in February, the lowest level since records began in 1992.

Just 49,000 loans were made to homebuyers in February, some 33% down on the same figure for 2007.

And the organisation's director general Michael Coogan warned that things were likely to get worse before they got better.

"There has been consistent evidence of tightening in lending criteria which will lead to shrinking pipelines of new business as the recent Bank of England's credit condition survey made clear," he said.

"We expect this process of further tightening in lending criteria to continue in the second quarter as lenders respond to the challenging market conditions."

The three-month period to February 2008 saw a total of 163,000 mortgages granted, the lowest figure for any quarter since the property recession of 1992.