Britains largest group of estate agents, Countrywide, confirmed this week that sales in the housing market in 2005 slumped to their lowest level for 30 years.

Harry Hill, Countrywide’s Managing Director is quoted as saying “It has been a desperately poor year. And anybody who says anything other does not have the information or is telling lies”. He went on to blame the four hikes in interest rates last year for increasing pressure on family finances.

According to the Council of Mortgage Lender, around 1.2 million houses are sold in England and Wales during a typical year, but the Council predicts that 2005 will go down as one of the worst on record with the number of sales falling 19% to 970,000.

Fears about affordability have been highlighted by figures published by the Office of the Deputy Prime Minister. Fewer than 6% of young people paid more than £100,000 for their first home in 1997 but by 2005 the figure has risen to 60%.

With the average house in the UK now costing £180,103 and with the average household income standing at £23,200 pa, this indicates that Mr & Mrs average would have to take a 100% mortgage of 7.8 times their income. This indicates that affordability will continue to put a brake on house price inflation.

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