RCIS reports house prices falling…

…as National Association of Estate Agents reports strongest month ever in July.

RCIS reports house prices falling...

Surveyors and estate agents are at odds over whether house prices are declining or rising.

The July UK Housing Market Survey from the Royal Institute of Chartered Surveyors published this week shows that more surveyors reported a fall in house prices than a rise last month for the first time since July 2009 as demand from purchasers slipped back and the number of properties coming to the market rose.

Some 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. In contrast, last month saw 8% more surveyors reporting rising, not falling prices.

Difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential homebuyers, RICS says.

Looking forward, expectations for house price increases have also turned negative, says RICS with 28% more surveyors expecting prices to fall over the coming months, up from 6% in June. Despite this, sales expectations remain positive, with 8% more surveyors expecting sales to rise rather than fall, although this is down from the previous month.

Meanwhile, the National Association of Estate Agents found that demand for housing had increased, more sellers were putting property onto the market and the average agent made more sales than in June. The average agent in July had 292 registered house hunters, up from 279 in June.

Supply was also up, with agents reporting an average of 68 properties on their books, compared to 59 in June. The percentage of sales being made to first time buyers also increased from 21% to 26%, suggesting that the decision to raise the threshold of Stamp Duty Land Tax to £250,000 is translating into sales.

“Demand and supply both increased in July, which is great news for the housing market. However we should not get carried away as what we are seeing is a slow, steady and patently fragile recovery,” said Michael Jones, president of the NAEA.

“One thing which is interesting is that consumer confidence in the market appears to be high, despite apparent uncertainty elsewhere about the future of the economy,” he added. But he warned that lenders are still being too restrictive. “One message that estate agents throughout the country are giving us is that the market needs more lending.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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