Housing market 'has to go up'

By Sarah O'Grady
Posted: 2008/09/02

THE housing market is at its lowest ebb and the only way now is up, a top economist predicted yesterday.

Geoffrey Dicks, chief economist at the Royal Bank of Scotland, said: "The housing market is beginning to bottom out.''

His forecast came as the Bank of England announced that mortgage approvals dived by 71 per cent during the past year to a new record low.

Just 33,000 were handed out in July, six per cent fewer than in June and well down from 114,000 in July last year.

But Mr Dicks said the fall in July was "only" 2,000, compared with 5,000 in June and 15,000 in May. And net secured lending in cash terms did not fall in July for the first time since November.

Home owners were offered more hope by figures from the Land Registry that show much less of a drop in property prices than had been feared by experts.

Values fell just two per cent - to an average of £178,364 - during the 12 months to July.

But Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said: "Yet another low for mortgage activity offers little hope that house price declines will find a floor any time soon.''