House prices fall as fear of double dip recession grows
The Government are assuring the British public that their savage cuts to public spending are essential to Britain’s financial health, but there are signs that these austerity measures are pushing the country back into recession.
The Royal Institute of Chartered Surveyors (RICS) has this week reported that the property market is suffering a fresh downturn with the Government’s anticipated public sector job cuts to blame.
The RICS study found that house prices fell in July 2010 for the first time in a year. Indeed, some valuers and surveyors told the RICS survey they had been astonished by the ferocity of the market downturn since the coalition government’s emergency budget in June.
Lack of confidence
There is a widespread expectation that there will be severe job losses in the public sector in the forthcoming months. The British Retail Consortium (BRC) blamed these job cuts for households putting off the purchase of expensive items, or moving home. “Talk of public spending cuts is unsettling consumers and they are concentrating on essentials,” said the BRC director general, Stephen Robertson.
As well as a lack of confidence, the availability of mortgage finance still remains a huge problem. The RICS survey discovered that a continued lack of access to mortgage funds was deterring many would be purchasers, particularly first time buyers.
House Price falls
As well as a lack of confidence in the economy, an increase in sellers has also contributed to July’s house price fall. The RICS also reported that a sudden increase in new properties going onto the market was having the effect of driving down prices. The abolition of Home Information Packs (HIPs) and sellers testing a previously rising market are believed to have contributed to this surge in properties coming to the market.