Home sales decline to lowest since 1978 in UK

Bloomberg

The average number of transactions in a survey of real- estate agents and surveyors dropped to 9.9 per respondent, the lowest since the data began three decades ago, the group said yesterday in London. A separate report showed the slowest total retail sales annual increase since 1995 in January.

The Bank of England may start buying company debt this week in a bid to get credit flowing through the economy after policy makers cut the benchmark interest rate last week to 1 percent, the lowest ever. House prices may fall "significantly further," the Financial Services Authority said Monday.

"This will get worse before they get better," said Dean Lomas, of real-estate agents John Earle & Son in Warwickshire, the West Midlands, the worst-performing region in the survey. "The current economic climate is affecting everything and will continue until we get some stability."

Overseas buyers

The number of agents saying prices fell in January exceeded those reporting gains by 76.3 percentage points, compared with 73.9 percentage points in December, RICS said. The measure was minus 91 in the West Midlands, and minus 74 in London.

Enquiries to real-estate agents by new buyers still rose for a third month, led by Wales, the East and West Midlands and London, RICS said.

"The majority of serious enquiries are coming from overseas cash buyers," Kevin Ryan, an agent at Carter, Jonas in London’s Westminster district, said in the report, adding that it was due to a drop in the value of the pound.

Wolseley, the world’s biggest distributor of plumbing gear, said Jan. 26 pretax profit fell 66 percent in the first five months of its financial year after customers delayed refurbishments and British housing starts dropped to their lowest since 1945.

"People are extremely nervous about their jobs and the way prices are going," said Jeremy Leaf, a spokesman for RICS. "It’s very fragile. There aren’t too many buyers around."

The number of homeowners in so-called negative equity, meaning the size of their mortgage surpasses the value of their property, will exceed 2 million if prices drop 30 percent from 2007 levels, the FSA said in a report Monday.

Prices "could fall significantly further," the FSA said. "The actual path may be significantly influenced by the success of policy measures."