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Slide in home deals shows sign of easing

There are some tentative signed that the precipitous slide in housing transactions is starting to level out, report by the Royal Institution of Chartered Surveyor suggests.

However, estate agents are less worried about the outlook for prices than they are about the near-freeze in activity. Tight credit conditions are locking many first-time buyers out of the market, while others are avoiding buying into a falling market.

“Activity may be beginning to stabilise, albeit at a low level.”

Potential buyers eased slightly, according to Bank of England data showing mortgage rates on popular fixed-rate products have edged down, partly because of a fall in swap rates determining lenders’ funding costs.

The average rate quoted for a two-year fixed rate mortgage, for a borrower with a 25pc deposit, fell from 6.6pc in June to 6.36pc in July.

But Simon Hayes, economist at Barclays Capital said lower rates were balanced by more stringent credit checks and non-price criteria. They would probably have little effect on mortgage activity, which had been much weaker in recent months that the level of rates would justify, he said.