There are currently one million unsold properties on the market in the UK, with homes taking the longest time to sell on record.
The number of properties for sale has risen by 12 per cent compared to this time last year. And, according to property website Rightmove it is taking a full fortnight longer to sell a property, up to an average of 85 days instead of the 71 days it took to shift a property a year ago.
After a decade of unfaltering growth, the property market has ground to a halt, with mortgage
lenders reacting to the lack of liquidity by withdrawing hundreds of loans, including all 100 per cent deals, raising rates, and demanding an average deposit of £25,000.
The decline in house sales is also trickling through to damage other markets, such as removal companies, which are suffering their worst business for 20 years. Estate agents have suffered, of which 1,000 have closed since the beginning of 2008, and construction companies are feeling the squeeze as one in four new-build homes are failing to turn a profit.
Even the top end of the market has suffered losses at the hands of the credit crisis, with £1million homes starting to come down in value. This is a far cry from last year, which, according to the Halifax Estate Agents Million Pound Property Report, saw sales of million pound properties grow by 36 per cent.
In 2007, 8,257 properties worth £1million were sold in the UK, compared to 6,057 in 2006, while there was a nine per cent drop in the total number of properties sold. Properties worth £2million also saw an increase last year, with 1,508 being sold – a 49 per cent rise compared to the previous year.
"Although there has been a marked increase in the number of million pound property sales over the past decade, a small number of local authority areas in London continue to account for the significant majority of £1 million sales." said Gordon Edwards, managing director at Halifax Estate Agents.
Meanwhile, there is hope that the credit freeze could be thawing, as Black Rock, an investment manager, has struck a $15billion deal to buy a portfolio of distressed sub prime mortgage debt from Swiss bank UBS.
Banks have been desperate to offload their risky mortgage assets, and experts have emphasised that getting the market moving again is crucial to its recovery. Until the full extent of sliding house prices, mortgage defaults and repossession can be seen, it remains difficult to value distressed mortgage assets and to find a buyer, but this offers a ray of hope during economically gloomy times.
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