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Page last updated at 10:44 GMT, Monday, 23 June 2008 11:44 UK

Figures show plunge in home sales

Estate agent's window
There are now far more sellers than buyers

The number of UK property sales has fallen by 32% this year, according to HM Revenue and Customs (HMRC).

There were 504,000 sales in the first five months of 2008 that were worth more than the new stamp duty notification limit of 40,000.

That compares with 743,000 such sales in the same period last year.

Meanwhile some big lenders have again put up the cost of their mortgages for new borrowers, with the Halifax and Lloyds TSB raising interest rates.

House and flat sales have fallen sharply this year, mainly due to the shortage of mortgage funds available to borrowers in the wake of the credit crunch, and the increased cost of borrowing the money that is available.

The HMRC's figures show that in May alone sales were down by 37% on last year at just 98,000.

Higher rates

The cost of borrowing a home loan continues to rise day by day.

The Halifax said it was putting up the interest rate on half of its fixed-rate deals by as much as 0.5%, and five of its tracker-rate loans have had their interest rates raised by another 0.3%.

"Wholesale money is very expensive," said a bank spokeswoman.

"Unfortunately, these increased costs have to be passed on to new customers by banks and building societies," she added.

Lloyds TSB, which sells mortgages through its Cheltenham & Gloucester subsidiary, has also made its fixed-rate deals more expensive, putting them up by 0.3%.

Someone taking out a 90% mortgage for two years with the Halifax will now be charged interest at 7.29%.

The effect of all this has been a glut of homes for sale on estate agents' books, according to the property website Rightmove.

It says that sellers now outweigh buyers by a ratio of 15 to 1.

"It's a sign that properties are taking longer to sell so there are more on the market," said Miles Shipside of Rightmove.

"There are approximately half the mortgages available there were a year ago, so there's only about half the transactions," he added.

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