House prices still falling reveals Royal Institute of Chartered Surveyors

House Prices

House prices are set to fall further, according to data revealed by the Royal Institution of Chartered Surveyors (Rics).

Over 44% of the 265 estate agents who participated in a Rics property market survey said they had witnessed a decline in prices over the last three months. Only 6% said that prices had increased, however, half of those polled said prices had remained stable.

Ian Perry, Rics spokesman, said: “First-time buyers are in particularly short supply as the high deposits required by lenders prevent them from taking their first steps on the property ladder. Without sufficient demand, property prices continue to slip back”.

He added: “However, many areas are reporting a correction, rather than dramatic falls in prices, and vendors who are prepared to be realistic with pricing are still able to achieve a sale”.

Stuart Allan of Broadley & Coulson in Bishop Auckland agreed with Rics: “The real problem in the market is first-time buyers’ inability to obtain mortgages, thus putting a brake on their ambitions to own property”.

Figures from the Council of Mortgage Lenders showed that 18,300 loans were issued to first-time buyers, down by 5% and 3% from the previous month and August 2009 respectively.

CML director Michael Coogan said: “August is a traditionally slow month for mortgage lending and it was no different this year. We expect a quiet market to continue for the foreseeable future. With some uncertainty surrounding future house price trends, we would expect a muted market in the next few years. The problem of excess capital, that led to record lending and borrowing in 2007, has self-corrected and will not return”.