RICS: Big price crash ‘unlikely’

Published 16th Apr 2008

The RICs is upbeat despite record numbers of surveyors reporting price falls in March…

In March, almost 80% of Surveyors reported house price falls, which represents the worst set of figures since RICS began the survey in 1978. The RICS house price balance dropped for the eighth consecutive month, exceeding the previously lowest reading in June 1990. The results come after leading mortgage lenders offered similarly downbeat views on property prices.

RICS spokesman Jeremy Leaf, commented: “The next six months will be crucial for homeowners and would-be buyers in the UK. The gloom is the result of the credit crunch and its effect in stopping mortgage providers lending to each other.
“Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight. A significant crash in prices remained unlikely though, and buyers with access to large deposits have the chance to get their hands on property they could not previously aspire to.
"Many would-be buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in the light of current economic uncertainty”.

Economic fundamentals still strong
Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA) called for steadiness amongst property market professionals and said that there are still strong economic factors underpinning the market that have not changed and that there is some good news.
“The positive news is that the RICS survey showed that just under a quarter of its respondents appear to have reported a rise in house prices, which shows how regionalised the picture is. We are already aware from our own members that house prices are being affected differently throughout the country so to find such regional discrepancies comes as no surprise.

“The market is battling with the credit crunch, which has undoubtedly had an effect on confidence. However, the key factors that underpin the housing market still exist – low unemployment, historically low interest rates and a pent-up demand for houses. We can see from the figures that it is not all doom and gloom out there and we need to tread very, very carefully before making long-term judgements on the market at this current, unsettled, time.”

Source: ' Move Channel Ltd '

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