UK Housing Market Heading Off Familiar Cliff

The UK housing market appears to be following the same pattern as the US market, with a year or so lag. Not good news for the UK consumer. And not good news for US companies banking on the UK consumer. WSJ:

Sentiment in the housing market in England and Wales deteriorated to its weakest level in more than 30 years in April as the global credit crisis weighed on demand and reduced the number of transactions, the Royal Institution of Chartered Surveyors said Tuesday.

The latest RICS housing market survey found yet more surveyors reported falling rather than rising prices in April, with the net balance declining to -95.1 percentage points in seasonally adjusted terms from a revised -79.4 percentage points in March, marking the lowest level since the series began in January 1978. The result was worse than the market consensus forecast of -80 from a Dow Jones Newswires survey of economists last week. March’s net balance was also revised down from -78.5 percentage points reported last month.

“Although most surveyors are now seeing price declines, the extent of the fall, is at this stage, quite modest,” RICS spokesman Ian Perry said in a statement. “The real issue is the collapse in the number of housing transactions. This has very real implications, not just for the property industry but also the high street and the wider economy.” Sellers of household appliances were likely to suffer if the low level of turnover persisted for much longer, RICS said.

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