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Two year low for house sales

The UK property market continues to look in a dire state, with a two-year low reported by estate agents.

Surveyors' body Rics reported that its members had managed to sell on average just 14.2 properties on average over the past three months, which makes it the least active period since June 2009.

Rics spokesperson Ian Perry said: 'The UK housing market continued to stall during July; prices edged lower and sales levels remained subdued. While the holiday season appears to have had some impact on the market, the continual problem of inaccessible mortgage finance is still preventing first-time buyers from accessing the market.'

Estate agents have more properties on their books than ever – rising from an average of 69.7 to 70.2 in June. And 13 percent more surveyors believe prices will take another hit rather than rise again.

Of course, things are more rosy-looking in London, which also sees the strongest level of enquiries from new buyers. Because of the price drops, many homeowners are finding themselves in negative equity, with their homes worth less than what they pay for them. The Council of Mortgae Lender's director general, Paul Smee, said that this doesn't mean homeowners will struggle to pay their mortgages. 'Negative equity is much less common than in the 1990s, and in the current cycle low interest rates and a relatively stable employment market are providing more options for borrowers and lenders in difficulty,' he said.

'There is no direct relationship between negative equity and mortgage payment problems. What typically causes difficulty for households is not a nominal fall in housing value but an unexpected change in personal circumstances, like the loss of a job or the breakdown of a family relationship.'

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