Home owners urged to sit tight

Shropshire homeowners were today urged to sit tight as new figures revealed the number of homes changing hands had fallen to a record low. Meanwhile, owners in negative equity are growing.

Figures from the Royal Institution of Chartered Surveyors today said estate agents sold an average of just 17.4 properties each during the three months to the end of May.

It represents the lowest figure since it began collecting data in 1978.

The news comes as the BBC reported that more than 23,000 people who took out 100 per cent mortgages in the year to the end of March face being left in negative equity because of falling house prices.

New buyer inquiries dropped for the eighteenth month in a row and the number of people putting their homes up for sale fell for the fifth month in a row. Twenty-six per cent more surveyors were seeing a drop off in new instructions than those seeing a rise.

Shropshire estate agent Nick Tart warned that property prices in the county looked set to fall further but urged people who now find themselves in negative equity not to panic.

He said: "It was inevitable that the bubble would burst but lenders carried on lending more than 100 per cent of the value of the property and a lot of people have been left above the high tide of the market."

He added that a slowdown in new instructions could support the market.

"We will see further prices fall in the county, therefore you are going to have to sell at reduced prices.

"But if you sit tight it will become a more balanced market again."