House sales take a dive

THE number of house sales has fallen to its lowest for a decade. Only 159,116 sales went through in the first three months of the year - the worst performance since the 1990s property slump - according to the property website Rightmove.

It says that sellers are refusing to cut prices to reflect the market, but will eventually have to face reality.

And it warns that the annual rate of house price rises will hit zero by July, with prices effectively at a standstill during the second half of the year.

Rightmove, which has looked at official data from the Land Registry, argues that unless there is a sharp improvement in fortunes the UK could see the lowest number of sales since 1974, when the total for the year was 970,000. Buyers have been driven out of the market by interest rate rises and a squeeze on budgets from higher taxes and household bills.

The effect of the housing market slowdown is seen across the economy. Retailers last week reported their worst turnaround in sales for a decade, particularly for furniture and kitchen products, and the Bank of England is facing demands for a cut in the 4.75% base rate.

Tesco could go into the estate agency business, selling homes for a fee as low as £ 50. According to trade magazine The Grocer, the supermarkets chain is in talks with a website specialist.

Features on the Tesco site would include a virtual tour of properties and a failsafe security system to protect vendors. Prospective buyers would have to register their credit card details online so their identities could be verified. Once approved, they could contact the vendor directly and arrange to view the property.

Capital's housing on the up

LONDON'S fragile housing market is poised for a summer revival as sellers get more realistic about asking prices.

Estate agent Haart is predicting a 10% jump in the number of houses sold over the next couple of months.

Haart managing director Russell Jervis said: 'Many vendors are now starting to listen to our advice and are putting their properties on the market at the right price.' Prices rose by 1.5% in April, boosting hopes that the worst of the housing slowdown is over.

The optimism contrasts with a gloomy report from property website Rightmove, which predicts the slowest year for British housing market turnover in a decade.