House prices drop in July, says RICS

House prices have fallen in July for the first time in a year, says the Royal Institution of Chartered Surveyors UK Housing Market Survey.

A total of 8% more surveyors reported a fall rather than rise in house prices – the lowest reading in more than a year, when 16% more reported price falls.

Last month saw 8% more surveyors reporting rising, not falling prices.

Regionally, the only areas which continued to see material price rises in the past month were London and the North West.

Expectations for house price increases have also turned negative, with 28% more surveyors expecting prices to fall over the coming months, up from 6% in June.

But sales expectations remain positive, with 8% more surveyors expecting sales to rise rather than fall, although this is down from the previous month.

Ian Perry, RICS spokesperson, says: “The fall in the RICS house price measure is broadly consistent with most other recent data that has been released. This is a reflection of both the increase in supply following the scrapping of HIPS and the more cautious stance from buyers.

“Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties.”

Demand for property, measured by the net balance of new buyer enquiries, fell for the second month in a row, from -6 to -10.

RICS says difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential home buyers.

But one-third more surveyors reported a rise rather than fall in properties to their books, up from 28% in June.

RICS claims the abolition of home information packs has been a factor in homeowners being more wiling to test the market.

The average number of properties on surveyors’ books also rose by 4.1% from June, taking the average to 69.1%.