House hunters are holding off buying property until they can see which way the market is moving.
The Royal Institution of Chartered Surveyors' housing market survey for the final quarter of 2002 shows that potential buyers have put their plans on hold while waiting to see whether house prices will fall dramatically or whether the market will have a soft landing.
RICS reported slight price falls in London, and the number of enquiries from potential buyers and the level of sales has fallen.
Away from London prices continued to rise, with 60% more surveyors in northern regions and Wales reporting rises than those who said there had been falls, and 44% more reporting rises in the West Midlands. In the South-East 19% more surveyors reported seeing gains.
Across the country, however, price increases slowed again for the third month in a row. 41% more surveyors reported a rise in prices during the three months to the end of December than those who reported a fall, but this was down from 46% in November and a record 63% in June. Nevertheless, the figure is still well above the long-term average of 24%.
RICS expects the property market to remain firm for the first few months of 2003 as the availability of homes remains tight. The average number of properties surveyors had on their books had risen slightly to 62, although this is still the lowest level since the late 1970s. In terms of predictions for the coming year, RICS reported that 12% more surveyors expect prices to rise rather than fall during the next three months. This figure is significantly lower than 31% recorded in November and back down to levels last seen in the aftermath of the September 11 terrorist attacks.