Property sales are facing a tough year ahead

Property sales for 2011 have been forecasted to show little sign of improving with the market 860,000 down from levels of 1.6 million before the credit crunch began. Would-be-buyers are also likely to suffer in the near future with their efforts in securing loan deals because the Council of Mortgage Lenders (CML) estimates net lending, which does not include repayments, will exceed £9 billion this year – well below the £110 billion homeowners took in 2006.

The figure is expected to drop even further to £6 billion, which if it does will be the lowest annual total since 1980, when the market was a lot smaller. The excessive drop in mortgages is said to come from a result of a shortage of funds, tight lending conditions and an uncertainty in the housing market.

The situation cannot be helped by the fact that the banks must repay the remaining £130 billion that was borrowed through the Government’s Special Liquidity Scheme by the end of 2011, as well as a warning that there could be a rise in the number of repossessions and people falling in to arrears.

CML did announce though that there could be a “modest boost” in sales by the end of next year as buyers rush to beat the end of the £250,000 stamp duty holiday.

By James Massoud