House sales tipped for 40 per cent fall

The Royal Institution of Chartered Surveyors (Rics) has warned that house sales could fall by as much as 40 per cent this year.

In its latest assessment of the state of the housing market Rics has suggested that continued caution by lenders will make it harder for would-be homeowners to get mortgages.

Rics chief economist Simon Rubinsohn said: "The second half of 2008 will prove a difficult period for the housing market," adding that "cautious" lenders will keep the supply of mortgages "restricted".

Mr Rubinsohn did say, however, that price falls and distress sales would be limited and not comparable with what occurred in the early 1990s, which may reduce the price of being able to pick up forced-sale bargains.

Such restrictions on the ability to buy a house may tempt many to seek to go down the self-build route.

Another mortgage issue which may concern potential buyers is that mortgage rates are now at their highest level for eight years, the Daily Telegraph reported last week.


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