Property sales 'to fall 40%'

People with flats and houses for sale in London will struggle to find buyers in 2008, the Royal Institution of Chartered Surveyors (Rics) has cautioned.

Issuing its latest forecast for the housing market, the professional body said that property sales will fall dramatically as a consequence of the ongoing credit crunch.

It further predicted a five per cent dip in house prices throughout the year.

If correct, such depreciation would mark the biggest shrinkage in the housing market since modern records began and according to Rics could cut consumer spending by up to eight per cent.

"Money looks set to remain tight and many will continue to find that access to the market is restricted by cautious lenders," commented Rics chief economist Simon Rubinsohn. "This could have important ramifications for the wider economy."

Property for sale in London has already taken a hit in recent weeks due to the wider market downturn, with Knight Frank recording a tenuous 0.1 per cent price rise in April.

News posted on 19th May, 2008