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WEDNESDAY 22ND JUNE 2005
 STABILISING UK HOUSE SALES TO SLIP BACK AGAIN

While Inland Revenue figures for the three months to May show that house sales have broadly stabilised during 2005, the Royal Institution of Chartered Surveyors (RICS) says more recent data indicates a slip-back since May. A deteriorating economic climate may mean tough times ahead, say the surveyors.

Figures released by the Inland Revenue this week showed that the number of property transactions were a seasonally adjusted 117,000 for May, unchanged from April but down 7% from three months ago. Compared to the same period in 2004, property transactions are down 23%.

Inland Revenue figures record transactions (incorporating both residential and commercial property) when they are officially registered, and can take place up to 14-16 weeks after a sale is agreed. The figures encompass both cash and mortgage finance purchases.

The figures show that transaction levels have broadly stabilised during 2005. For the three months to May, the average monthly transactions were 118,000 compared to an average of 117,000 in the first quarter, but down from 137,000 in Q4 2004. While sales activity has stabilised, market conditions remain subdued, as households must shoulder increasing mortgage costs of more than 40% since the interest rates low in the autumn of 2003.

More timely statistics released by RICS (obtained from chartered surveyor estate agents), showed newly agreed sales and new buyer enquiries slipped back during May, after showing a modest improvement during the first few months of the year. With the economic climate showing some signs of deteriorating in recent months, conditions will remain tough in the months ahead, though a gradual recovery later in the year is still forecast, said RICS.


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