NEWS

Bargain Hunters Return to market

The number of people seeking to buy a home surged to a two-year high last month as bargain-seekers searched for repossessed and forced-sale properties at bargain-basement prices, new figures suggest.

However, the increased level of interest from potential buyers was not enough to perk up the dire situation in the housing market, with the number of sales slumping to a new 30-year low between September and November.

Estate agency branches sold an average of 10.6 houses each in England and Wales in the three months to November 30 - less than one house a week. That figure was down from 10.9 houses in the three months to October 31, a survey from the Royal Institution of Chartered Surveyors (RICS) showed. That is the lowest figure recorded since RICS began its survey in 1978.

As sales of houses fell, the prices that they achieved also continued to decline during the month, although the proportion of agents reporting price falls eased slightly. About 76.5per cent more surveyors reported that prices fell rather than rose in November, compared with 81 per cent in October.

One glimmer of hope in the grim RICS figures was the rise in the number of inquiries from new buyers, with more surveyors reporting that inquiries rose, rather than fell, for the first time since October 2006.

Inquiries rose sharply in the South West and the West Midlands but buyers in London and the East Midlands were still scarce, surveyors said.

There are hopes that Government plans to allow borrowers who fall into difficulties a two-year holiday on paying interest on a portion of their mortgage could reduce the number of distressed sellers, slowing the pace of house price falls. But Simon Rubinsohn, an RICS economist, said that could serve to depress the number of transactions further. House prices have been dragged down by the drought in the mortgage market, with lenders demanding large deposits.

HSBC pledged to increase mortgage lending next year to £15 billion, 20 per cent above this year's level.

But the misery for homesellers was compounded as the Government announced that its controversial Home Information Packs (HIPs) will be mandatory as soon as homeowners put their house on the market from April next year.

At present, sellers can market their home for 28 days without a HIP, which provides buyers with property information and costs about £300 to produce, if they have ordered one.

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