Government's spending cuts impact housing market

  • Story by: Donia O'Loughlin
  • Magazine: FTAdviser
  • Published Thursday , July 29, 2010

Both the number of houses being put up for sale and those being sold dropped in July, data from the monthly Agency Express property activity index has shown.

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Agency Express blames this on the government’s recently announced spending cuts as potential buyers have revised their budgets and are putting their moving plans temporarily on hold.

For the second consecutive month, the number of monthly house sales has fallen. In July, it dropped by 2.9 per cent compared to June. This was the lowest level since January 2010.

The number of houses being put up for sale also suffered, plummeting 7.3 per cent in the month. This was the first time this year that the number of sales instructions has dropped, said Agency Express.

Stephen Watson, managing director at Agency Express, said: "Anyone working in the public sector will see a drop in their real income as they won’t get a pay rise until 2012, at the earliest.

"In addition, the rise in VAT next year and the pressure on some companies for it to reduce the hours for its workers will hit people’s household budgets.

"It seems that people who have been looking to move have paused to take stock of the situation and to recalculate their budgets."

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