RICS Reports More House Price Falls

The latest survey from the Royal Institution of Chartered Surveyors (RICS) indicates that house prices are continuing their downward trend.

For the first time since the house price crash of the early 1990s, the number of surveyors reporting falls in house prices increased for the sixth month in a row. In January there were 54.7% more surveyors reporting lower house prices in January than those seeing higher prices. December’s figures was 49.1%, and the gap has steadily increased from 3.1% when the balance was tipped last August.

The January figure is the highest since November 1992, the measure than having grown for five consecutive months.

The institution blamed a weakness in demand for property, rather than a drop in supply coming to market, for the rising balance. The effects of the credit crunch are also still holding back would-be buyers from entering the market.

Other recent figures support evidence of the declining house market. The number of home loans approved fell by more than 20% in December, and the Halifax said that house prices continued to fall in January. Goldman Sachs, the investment banker, has forecast a 5% fall in property prices in 2008, followed by another 2% in 2009.

Demand was muted with 35% more surveyors reporting a decrease in the number of prospective house buyers than those seeing an increase.

The stock of unsold property was up by more than 10%, according to RICS, and has gone up by over 40% since September. The average number of unsold properties per surveyor is now 85 – the highest since February 1999 when the figure was 86.

Spokesman at RICS, Jeremy Leaf, said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown. Tightening mortgage lending criteria is a block to many who are keen to take the housing market plunge. Agents are finding it difficult to market properties to an audience which has decided to watch the current economic theatre from the wings.