House sales are at a 30-year low, a report from the Royal Institution of Chartered Surveyors (RICS) has revealed.
Estate agents sold an average of just 17.4 properties over the past three months, a 32% drop compared with the same period last year and the lowest level since records began in 1978. Even during the depths of the housing crash in 1991, estate agents sold 26 properties in any three-month period, almost 50% higher than last month's figure.
Around 93% of RICS surveyors reported that house prices had fallen during May. Last week, the Halifax revealed that house prices fell by 2.4% last month, fuelling the belief that the UK's once frothy housing market is in a downward spiral.
David Hollingworth, from mortgage broker London & Country, believes that the fall comes as no surprise. “The purchase market is very slow, and falling property prices will undoubtedly put people off buying in the current climate. Potential buyers are likely to hold off until current uncertainty shakes itself out of the market.”
But figures from the Council of Mortgage Lenders (CML) also paint a worrying picture, revealing that more than 23,200 people who took out 100% mortgages in the year to 31 March 2008 could now be facing negative equity – owing more than their property is worth.
Jeremy Leaf, a spokesperson for RICS said: "While demand remains weak and housing transactions continue to evaporate, there is a very real danger to the wider economy.
"The property industry will not be the only casualty in the fallout from the credit crunch, with the high street and purveyors of a range of household goods, including furniture and white goods also feeling the pinch."
The British Retail Consortium said that despite May's warm weather seeing sales on the high street rise by 1.9% last month, the housing slowdown and tighter household budgets meant that sales of big ticket items were falling dramatically.