House prices still falling, say surveyors
Demand in the housing market remains subdued as prices fall and sellers outnumber potential buyers, according to the Royal Institute of Chartered Surveyors.
The imbalance between supply and demand has pushed prices down and according to the institute, 36% of surveyors reported a fall, rather than a rise, in house prices in September.
Almost half (44%) of its members had seen prices fall in the past three months.
Ian Perry, spokesperson for RICS, explains that the "fresh influx of property to the market combined with a lack of buyers" are the key problems to have affected the sector.
However, he points out that many areas have reported a correction, rather than dramatic falls, and says vendors who are prepared to be realistic with pricing are still able to achieve a sale.
According to the institute, the number of sellers may increase further, if homeowners decide to sell their houses in the next few months ahead of further spending cuts and before a potential deterioration in the economy.
Conversely, results from the Council of Mortgage Lenders show a pick-up in new purchase applications, up 14% in September. It’s believed this surge in mortgage applications has been fuelled by continued low interest rates and increased competition between providers.
However, Brian Murphy, head of lending for the Mortgage Advice Bureau, expects the mortgage market to remain subdued over the next few months.
He says: "With the new coalition government announcing specific plans to make changes to the provision of child benefit ahead of the widely anticipated spending review, we are seeing real evidence that disposable incomes are going to come under considerable pressure and this is likely to put a further brake on borrowers’ ability and appetite to move home."