UK house prices inch lower in August - RICS

LONDON Tue Sep 13, 2011 12:02am BST

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LONDON (Reuters)- House prices in England and Wales fell in August and transactions slipped to levels last seen during the recession in 2009, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors' seasonally adjusted house price balance inched down to -23 from -22 in July, in line with the median forecast in a Reuters poll.

Economic uncertainty, a lack of home loans and expectations that prices have further to fall have combined to create a sluggish market, the trade body said.

"Our indicators suggest that demand for homes remain broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom," said RICS spokesman Alan Collett.

"However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers."

The average number of sales per surveyor over the last three months fell by 1.4 percent to 14, a 26-month low.

The balance of new buyer inquiries, a measure of demand, fell to -3 in August from +8 in July, while new instructions from sellers edged up in August to zero from -8 in July.

The price expectations balance for the next three months fell to -23 in August from -13 in July, suggesting more surveyors expect UK property prices to keep slipping.

Those questioned were also asked to identify the biggest problems weighing on the housing market. The top answer was economic uncertainty (78 percent) followed by a lack of mortgage availability (66 percent).

Other British house price measures suggest the market has been flat or modestly falling during 2011. Most economists expect prices to edge lower during the rest of the year as Britain's sluggish growth, high inflation and low wage growth erode buyers' confidence.

(Reporting by Peter Griffiths; editing by Ron Askew)

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Comments (1)
Marylyn wrote:
One would almost imagine that a goodly chunk of the British economy is selling houses to each other. There have been so many attempts to keep properties turning over at bubble prices that it’s a wonder anything is sold at all with so little money about. Figures/statistics are misleading. The more vested the interest, the higher the average price quoted.

Simply, it isn’t going to happen. We all know that selling prices are about 30% below asking prices. We also know that only the more affluent who need a mortgage buy now with interest rates likely to go only one way.

Ultimately prices have to be affordable – somewhere between 3 and 3.5 times the salary of the buyer. So they have some way yet to fall. Best to let them.

Sep 12, 2011 12:20am BST  --  Report as abuse
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