What happened to the property purchasers in the UK?

Now, the questions asked are, why are house prices falling so drastically, and why if the prices are falling is it so difficult to find property purchasers?

Alliance & Leicester contracted Opinium Research to survey 2 035 people and according to the research done, approximately 3.3 million homeowners intend to sell their property in the next year. That works out to one out of every eight homeowners. This, despite the fact that house prices are plunging and it is not the best time to sell house (profit-wise).

Why is it so difficult to find property purchasers?

The problem is that currently the number of properties for sale in the UK is greater than the amount of property purchasers in the industry.

Some emphasise that the lack of home buyers is due to the deficiency of mortgage finance and stricter mortgage lending conditions than before. According to The Council of Mortgage Lenders, the amount of mortgages being approved has dropped significantly, the lowest it has been in the last seventeen years. It has got so bad that one of the major mortgage lenders, Halifax, had to raise their fixed rates for home loans for the twentieth time since the start of 2008.

The strict mortgage lending conditions have made it even more difficult for first-time home buyers to get into the property market. The ratio of house prices to incomes is another factor that makes it increasingly difficult to secure a home loan.

The house price-to-income ratio was 3.36 in 2003, whereas now in 2008 the average income is about £38 302 and the average house price tops £197 000, making the house-price-to-income ratio a whopping 5.1.

It is understandable from the above that the number of property purchasers in the UK property industry is significantly low at the moment. However, there is definitely a ray of sunshine at the end of this dark tunnel.