U.K. Could See Lowest Property Sales On Record This Year

London–The credit crunch could cause U.K. property sales to drop 40 percent in 2008, according to the Royal Institution of Chartered Surveyors’ (RICS) new housing market forecast.RICS also forecast that home prices could decline by 5 percent–which would be the largest drop the U.K. housing market has ever seen, BBC News said.The biggest property sales…

London–The credit crunch could cause U.K. property sales to drop 40 percent in 2008, according to the Royal Institution of Chartered Surveyors’ (RICS) new housing market forecast.RICS also forecast that home prices could decline by 5 percent–which would be the largest drop the U.K. housing market has ever seen, BBC News said.The biggest property sales plummet on record came in 1989 when prices dropped by 26 percent in England and Wales; this year, sales already are 32 percent less than in 2007, RICS said. Some economists are concerned that a large decline in home sales could cut consumer spending. “Money looks set to remain tight, and many will continue to find that access to the market is restricted by cautious lenders,” RICS chief economist Simon Rubinsohn said.After a decade-long period of price increases, homes became unaffordable for many first-time buyers in the past year; the banking sector credit crunch further fueled the U.K. housing decline by causing lenders to reduce the number of loans issued.