Tuesday May 13, 12:16 AM
UK RICS April house price balance -95.1 pct, record low
LONDON (Thomson Financial) - The crisis in the UK's lending markets has pushed the number of chartered surveyors reporting house price falls in April to its highest level since records began, the Royal Institution of Chartered Surveyors
said today.
In its monthly survey of the sector which began in 1978, RICS said 95.1 percent more of its members reported a fall in prices rather than a rise in the three months to April. The regional picture is even more depressed with surveyors in East Anglia, the North and North West unanimous that house prices are falling.
The overall house price balance was even worse than the -79.4 percent recorded in March. The original estimate for March of 78.5 percent was itself a historical high.
The scale of the decline, the ninth in a row, was unexpected. The consensus of analysts polled by Thomson Financial News saw the house price balance worsening slightly to -80 percent.
Despite the further rise in the number of surveyors reporting house price falls, RICS said the scale of the decline has been limited by tight supply, adding that large numbers of distress sales from repossessions or those attempting to avoid the repossession process, have not yet appeared. New instructions to sell property fell for the fourth consecutive month and at about the same pace as in March, it said.
RICS said the serious issue relates to the number of housing transactions. Completed sales for the quarter to April fell for the twelfth consecutive month to 18.3 per surveyor, from 22.2 in March. On year ago levels, they are down by 31.7 percent.
'This has very real implications, not just for the property industry but also the high street and the wider economy,' said RICS spokesperson Ian Perry.
The prospects for the housing market don't look particularly healthy either with the net balance of surveyors expecting prices to rise at -80 percent, its lowest since this series was included in the survey in October 1998, compared with -74 percent in March.
RICS reported that 68 percent more chartered surveyors reported a fall than a rise in new buyer enquiries, up from 51 percent in January. with many would-be-buyers either struggling to raise the necessary finance or exercising caution in the light of current economic uncertainty.
With the Bank of England's recent rate cuts not being fully passed on to the high street and lenders reining in the range of mortgage products, there is little expectation that demand will improve in the near term, RICS said.
As a result of this lack of supply, the average number of unsold stock on surveyors' books edges down. The ratio of completed sales compared to the stock of unsold property on the market fell to 21.1 percent, down from 24.6 percent.
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