House price fall at record low
The latest housing market survey from the Royal Institution of Chartered Surveyors (RICS) shows that house prices fell to an all-time historical low in March.
[ClickPress, Wed Apr 16 2008] The latest housing market survey from the Royal Institution of Chartered Surveyors (RICS) shows that house prices fell to an all-time historical low in March, as the effects of the global credit crisis continue to have a damaging impact on the UK property market. The survey showed that 78.5% more chartered surveyors reported a fall than a rise in house prices (an increase from 65.7% in February), which surpasses the previous lowest figure of 64.5% in June 1990 and is the lowest figure since the survey began in 1978.
On a regional basis, the picture looks even worse, with 89% of chartered surveyors in the East Midlands reporting a fall in house prices and 86% in East Anglia. Scotland continues to be the only region in the UK where surveyors reported a net rise (of 4%) in house prices.
With the sharp cut-backs in the availability of mortgages and the lack of borrowing options caused by the credit crisis, it is clear that the fall in prices is being driven by the inability faced by many to secure the necessary financing for a house purchase, rather than an influx of supply.
The fall in demand continued – for the sixteenth consecutive month and at the fastest rate since March 2003 – with 49% more chartered surveyors reporting a fall than a rise in new buyer enquiries. And it is not expected that this situation will improve in the near future, as the official interest rate cuts are not being passed on to the high street and consumers struggle to obtain financing.
On the supply side, surveyors also reported a decline in new instructions to sell property, with the ratio of sales compared to the stock of unsold property falling to 24.8%, the lowest figure in twelve years.
Furthermore, the expectations for any rise in both sales and prices also fell, with the balance of surveyors expecting prices to rise being at an all-time low of -73%, and sales expectations also in negative numbers.
Commenting on the RICS survey, Lawrence Smith of Decision Homebuyers said that “Prospective sellers remain in an indefinite holding pattern as long as demand remains low and house prices continue to fall.”
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