Rays Of Light From Surveyors
Although RICS reported its lowest ever number of sales in July, the survey points to a new realism among sellers, and Southern surveyors have indicated a feeling for a static market. Meanwhile fixed-rate mortgages came down in July.
There were some rays of light to be found in the latest RICS survey.
Although the lowest number of people in a month moved house in July since records began in 1978, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS), the surveyors report also found that a new "realism" has come to the market as sellers have been reducing asking prices for their properties.
The reduced availability of mortgages continued to be the key factor in slowing the housing market down, but added that the mixed messages coming from the Government about stamp duty could also dent confidence.
In the RICS survey almost 84% more surveyors reported a decrease in house prices than those reporting a rise. This was down from just under 87% in June, indicating perhaps the merest slowdown in house price falls.
In sales, however, there were only 14.4 sales per surveyor in the period May to July, compared with 15.3 for the three months to June.
Ian Perry of RICS blamed the lack of mortgage finance for the continuing slump in demand, saying that first-time buyers were becoming an "endangered species". He thought that sales activity might pick up in the next few months as sellers were beginning to understand that they had to reduce their asking prices from unrealistic levels.
Surveyors still believe that house prices will fall further in the next three months, with Yorkshire and Humberside leading the gloomy feeling. Meanwhile, in London, the South East and South West the mood was slightly more optimistic, with some talking of a "static market".
Recent house price surveys from both Halifax and Nationwide have indicated that the annual average house price fall has been around 8% to the end of July.
If mortgage scarcity has been the main reason for a slump in the market, then the good news in July was that there was a fall in the rates of fixed-rate mortgages.
