House prices fall to near historic levels, reveals RICS

A whopping 64% more chartered surveyors reported a fall in house prices to near historic levels in February, reveals the Royal Institution of Chartered Surveyors.

It compares with 54.7% in January and 64.5% in June 1990.

Its UK housing market survey, published today, also reveals that stock piles rose to levels not seen for a decade.

Meanwhile, the RICS house price balance dropped for the seventh successive month, signalling more than half a year of negative market sentiment.

But the net balance of surveyors in Scotland reporting price rises surged from 7% to 25% – a significant jump in the current economic climate, indicating that Scotland still remains the most buoyant market in the UK.

RICS data also reveals a weakening in enquiries, with 37% more chartered surveyors reporting a fall in new buyer enquiries, down from 35% in January.

The institute attributes the fall to prospective buyers’ difficulty in raising the necessary finance to precipitate a move. It also suggests that many buyers are exercising caution in light of current economic uncertainty.

It adds that price falls are being driven by weak demand rather than an influx of new supply as the balance of surveyors reporting new instructions to sell property remained in negative territory.

And while employment conditions remain strong, home owners are under little pressure to sell.

The stock of unsold property on surveyors’ books jumped by more than 8.5% in February – the fifth successive monthly increase in excess of 8%.

Currently, the average level of unsold property per surveyor stands at 92 – the highest level since October 1998 when the average figure per surveyor was 93.

As a result, the ratio of completed sales compared to the stock of unsold property on the market fell to 26.5% – the lowest number since September 1996.

A spokesman for RICS says:”While there is very little new supply coming onto the market, it is unlikely that there will be significant price drops in the short term but the build up of unsold stocks will encourage buyers to negotiate lower asking prices.”