Summer slide in house prices pushing sellers to put off until Autumn, surveyors report

Published 13th Sep 2011

The number of surveyors reporting house price falls increased last month with fears for the economy overtaking a lack of mortgage availability as the main reason for the slide, according to RICS.

The Royal Institute of Chartered Surveyors said its survey of members showed 23 per cent more reporting falls in August than reported rises, up from 22 per cent in July.

Within this, 79 per cent of surveyors blamed 'general economic uncertainty' for the falls, while 66 per cent blamed a lack of mortgage finance.

The survey results added to evidence that the number of transactions falls away. This was most apparent in London where 74 per cent of RICS respondents blamed a lack of stock for the subdued housing market.

RICS reported activity levels as being flat in August, with the average number of sales per surveyor (branch) at 14 (a 26 month low). Also, the average amount of properties on surveyors’ books fell in the month by 4.6 per cent to 67, with anecdotal evidence from surveyors suggesting many sellers are taking their properties off the market until Autumn.

Most house price measures have turned negative during the summer. August's Halifax report puts prices down 2.6 per cent annually, Nationwide has them down 0.4 per cent over the same period and the Land Registry has them sliding 2.1 per cent in the year to July.

According to the RICS data, every region saw falls in house prices apart from London where the balance of surveyors who saw an increase reached a 15-month high. East Anglia and the West Midlands saw the most severe declines, with a balance of 62 per cent and 63 per cent respectively reporting falls.

RICS housing spokesman Alan Collett said: 'For the time being, our indicators suggest that demand for homes remains broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.

'However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.'

A balance of 3 per cent of surveyors reported a decline in new buyer enquiries, signalling that demand is set to continue falling.

Surveyors had become more pessimistic about future house prices, with a balance of 23 per cent expecting prices to fall over the next three months, up from 13 per cent the previous month. But surveyors were hopeful of a modest pick-up in activity over the coming months.

Source: ' ThisIsMoney '

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