Sales down a third as the mortgage market dries up

Sunday 29 June 2008 00:00 BST
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The number of properties sold in the UK has fallen by 32 per cent this year, says HM Revenue and Customs.

The number of houses sold that were valued at more than £40,000 – the threshold at which land tax returns have to be filed to HMRC – fell to 504,000 between January and May, from 743,000 in the same period last year. Sellers now far outweigh buyers as mortgages become harder to secure.

Louise Cuming at financial comparison site Moneysupermarket.com said: "The mortgage industry should bear much of the blame for the stagnation of the housing market. The mortgage landscape is unrecognisable today, with the number of products decreasing from more than 30,000 in August 2007 to around 5,000 today.

"The indications are that the Bank of England is now more likely to consider increasing the base rate to try to combat inflation. What effect this will have on homeowners' pockets and their increasingly fragile confidence doesn't bear thinking about.

"Lenders have done a U-turn in respect of the risk they are prepared to take, which is hitting borrowers with little or no deposit or equity," she added. "This directly affects first-time buyers, who are the lifeblood of the housing industry."

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