House sales have dropped by 40% since boom years

House sales have dropped by almost 40% since the housing boom according to the Housing Market Survey released by the Royal Institution of Chartered Surveyors.

Estate agent members of RICS reported completed house sales at 15.6% in May 2012, down from 25.4% the same month in 2007, almost 40%.

A rise in mortgage rates and a tightening of lending criteria may have been partly to blame for the drop in sales, the result of a difficult economic climate.

However RICs also said that surveyors expect the housing market to stabilise and the number of transactions to increase of coming months.

RICs housing spokesperson Peter Bolton King said:

“It’s no surprise to see such a sizable drop in transactions since the market peak back in 2007. Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market.

“In spite of this, a gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across most parts of the country.”

With sales transactions at a low the survey also found that home were likely to take “considerably longer” to sell, with only 23.1 % of homes on members’ books sold in the three months leading up to May 2012, compared to 40.9% in the same period in 2007.

Meanwhile house prices continued to decline last month with 16% more of respondents reporting a fall in prices, a reading which has remained negative for the last two years.