U.K. Housing Market slump reaches post 1992 recession level.

The Royal Institution of Chartered Surveyors (RICS) has indicated that the housing market-slump last month has slumped to its worst point since 1992.

The RICS revealed today that the measure of house prices fell by one point to -63, which is the lowest figure since the records began in 1998. It has revealed a widespread decline, with 43% of respondents in London reporting declines in commercial and residential property prices.

Jeremy Leaf, the RICS spokesman said that “agents are finding it difficult to market properties to an audience which has decided to watch the current economic theater from the wings”. This is made worse by the tightening mortgage lending criteria making it even harder for those that are willing to dabble in this uncertain climate.

The RICS, a body which represents around150,000 property surveyors, revealed that a buoyant labor market and a more favorable lending market should reignite demand for residential property.

The overriding concern is that the market will stagnate as there are fewer first time buyers on the market, and many property professionals are calling for interest rates to be cut further.

The Bank of England’s base rate is now 5.25%, although there is reluctance by the Banks to pass on more attractive mortgage rates to customers.

The weakness of the property market has threatened to make the current economic slowdown worse. Despite the second cut in interest rates curbed lending due to high losses and write-downs are styfling the property market further.

Story link: U.K. Housing Market slump reaches post 1992 recession level.