Housing market confidence falls further

A balance of 95.1 per cent of chartered surveyors are reporting house price falls, as buyers steer clear of the market.

The Royal Institution of Chartered Surveyors (Rics) housing market survey reveals the widespread slowdown in UK property – with just one per cent of surveyors seeing prices rise.

The number of new buyers also fell with a balance of 68 per cent of charters surveyors seeing a fall in the number of new buyer enquires – compared with 51 per cent in January.

In response the number of completed sales per member in the last quarter fell to 18.3, from 22.2 in March.

However, Rics is warning that while its figures show the breadth of the market slowdown, it is not showing how far house prices are falling.

Indeed, the body reports the weakness in the housing market is not being driven by new properties coming onto the market.

With homeowners sitting out of the market amid the credit crunch making raising finance harder, the number of unsold properties on Rics members' books fell to the lowest level this year.

Rics spokesperson Ian Perry said: "Although most surveyors are now seeing price declines, the extent of the fall, is at this stage, quite modest. The real issue is the collapse in the number of housing transactions. This has very real implications, not just for the property industry but also the high street and the wider economy.

"Sellers of white goods are likely to suffer if this low level of turnover persists for much longer.

"This is a key reason why the Bank of England should act at its next meeting by cutting the base rate."

Amid the property slowdown the Rics data reveal the level of distressed sales – either repossessions or sales from those attempting to avoid repossession – has yet to rise as mortgage arrears remain low.

Data on expected prices, however, was particularly depressing – hitting the lowest level since recorded started in 1998.

Except for East Anglia, the south-east and north-west, confidence deteriorated further across all regions in England and Wales. No surveyors from Yorkshire and Humberside and the East Midlands expected prices to rise over the next three months.

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), said: The report reflects our own take on the market: The house prices falls that are taking place are modest and the picture is still patchy with some areas of the country finding it tougher than others.

"There is no denying that the credit crunch has affected confidence in the market - especially first time buyers who are finding it hard to find financing to get on the ladder - but it is still important to remember that the underlying factors that support the property market remain: low unemployment, historically low interest rates and a pent-up demand for houses.

"Therefore, rather than a dramatic fall that some doom and gloom merchants are predicting, it shows we are looking at a return to a more steady market rather than the fantastic price hikes we have seen in the previous ten years."


Daniel Barnes