Brown must act as transactions sink below 90's levels, says Wolsey

19 August 2008

Wolsey says Bank of England figures showing that only 36,000 mortgage approvals were made in June.

The low level represents over a 60% drop in activity on the worst year of the 1990s housing market crash, when transactions ran at approximately 1 million.

Mike Ratcliffe, chief executive of Wolsey Securities, says: “Transaction levels have now dropped to dangerously low levels that have not been seen in several lifetimes.

“The housing industry cannot sustain this level of trade. If there isn’t an improvement soon many will fold, as their cashflows will not be able to meet overheads and interest costs.”

Wolsey says if the government waits until the autumn it will have a devastating impact on the economy, especially considering the impact of Stamp Duty speculation.

Ratcliffe adds: “In the last few weeks there have been signs that the housing market’s deterioration was slowing with a number of key indices, including the Halifax, showing a slow down in price falls.

"Our own portfolio of over 2,500 units has also shown a slight uplift in reservations. This could well be the first indicator that we have reached the bottom of the market.”

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