The harbingers of doom are constantly warning of a decrease in property sales and the effects this is having not only on the property market but on the economy as a whole. Today, predictions for property sales within the UK are particularly downbeat, a recent report from the Royal Institution of Chartered Surveyors gloomily predicted that this year could see property sales fall by as much as thirty percent.
But this situation is in a way a self fulfilling prophesy, understandably estate agent are attempting to downplay the fears but as the media constantly reports the bad news, the general public are drawn to make certain conclusions on the state of the property market in the UK.
As the media is now almost reporting further falls in property sales daily, the knock on effects are becoming clearly evident. Most startlingly buyers are in fact holding tight until the proposed 'crash' is going to occur. Agents are understandably trying to dispel this myth that in six months time that property prices will be so low that everyone will be able to buy and hence sales will increase. Preferable for the agents is a steady number of sales, even if in decline; if buyers continue to wait there is no surety that the prices will collapse, remember that sellers can be just as stubborn as buyers.
Even if buyers do continue to wait however it can be seen as a ray of sunshine for those who work in property sales. It shows that on the horizon there are many who are willing to buy but are simply waiting for cheaper prices. However while some may be able to grab bargain, many will most likely be left unsatisfied.
The drop in property sales is not just about buyers waiting for lower prices though; the current mortgage crisis has much to do with the problems in the market. While in past years it has been the case that buyers have been able to secure one hundred percent mortgages the situation is now wholly different.
As the American financiers found that they have overreached themselves and are facing record numbers of non-payments the ramifications have quickly leapt across the pond. The current situation in the UK is that lenders are being far more careful with their money, meaning that first time buyers and even existing home owners are finding it hard to make progress on the property ladder.
It is now advisable to have a considerable deposit if you are wishing to buy a property; for the sake of property sales in the UK the general hope is that there is a wealth of buyers out there that have these funds. With unresponsive lenders all hopes are pinned on peoples' savings. As we have seen however in the lat few years there are not many people who having been saving, the consumer culture has led to a situation where there is nearly an entire generation dependent upon their credit cards for financial support. As seemingly everything in life becomes more expensive it is understandable that people are tightening their purse strings and renting instead of buying.
The property figures are just a symptom of a wider issue of the public's financial situation, as properties are the most expensive thing most people will buy in their lifetime; it is unsurprising that they should be hardest hit by these frugal times.
This rather gloomy outlook is not certain however, predicting the property market is a notoriously difficult task, even with years of experience within the estate agency industry. Ultimately people will always need homes and hence it will survive. As anyone with an elementary understanding of economics will be able to grasp, capitalism operates along a boom and bust schedule and as the property market has been clearly booming in recent years, sooner or later the cycle had to move to a period of slowdown.
Real estate expert Thomas Pretty looks into how the property sales figures in the UK are changing.