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House prices fall for first time in a year as supply outstrips demand

House prices fell in July for the first time in a year, says the Royal Institution of Chartered Surveyors.

More chartered surveyors repor-ted a fall in prices than a rise for the first time since July 2009 as demand slipped and the number of properties coming to market continued to rise.

Some 8% more surveyors repor-ted a fall than rise in house prices in the month.

But Chris Norris, policy manager at the National Landlords Asso-ciation, is reluctant to say this is the start of a trend.

He says: “I wouldn’t read too much into these figures as I believe this is a case of more surveyors reporting price falls rather than an overall decline.”

But Datamonitor analyst Daoud Fakhri says the recovery in property prices has run out of steam and they are likely to remain static for some time, or even fall.

He says: “Demand for property will remain low for the foreseeable future due to lack of confidence and the shortage of mortgage finance which is continuing to affect first-time buyers in particular.”

Meanwhile, the Bank of England has downgraded its forecast for growth by 0.9% for next year. The Bank now expects the economy to grow by 2.5% in 2011, down from its previous forecast of 3.4%.

And Bank governor Mervyn King has warned that the economy faces a choppy time in the next two years and that a lack of lending will limit growth.

The Bank’s quarterly inflation report predicts that inflation will stay above its 2% target next year but should be back on track in 2012.

But official figures out last week show there are some signs of improvement on the jobs front, with unemployment declining for the second quarter running. It fell by 49,000 to 2.46 million.

The number of individuals finding jobs between April and June was the highest for more than 20 years.

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