London - House prices kept falling sharply in the three months to August even as the average number of home sales per surveyor hit a new low, a survey showed on Tuesday.
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The Royal Institution of Chartered Surveyors said its house price survey balance improved slightly to -81 in August from -83 but still showing a weak picture for the housing market, which is now slumping after a decade-long boom.
"A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery," said RICS spokesperson Jeremy Leaf.
Faced with a global credit crunch, mortgage lenders have tightened up the terms on which they make new loans, demanding as much as 25 percent of a property's value as a deposit when before they would look for 5 percent or even provide as much as 120 percent of the value themselves.
The result has been a sharp fall in house prices and transactions drying up - the effects of which are being felt right across the economy with construction and furniture retail companies particularly hard hit.
RICS said completed sales per surveyor stood at just 12.7, the lowest figure since the question was first included in the survey in 1978. Inventory levels on surveyors' books also fell back.
As a result, the ratio of sales to the stock of unsold property - an indicator of market slack - fell to 15.4 from 16.9 in July.
The tentative improvement in sentiment seen in July's survey have also proven to be short-lived, with a bigger balance of surveyors expecting sales to fall further. (Reporting by Sumeet Desai; editing by Victoria Main)
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