A new report from RICS reveals further doom and gloom in the housing market, with November home sales falling at the fastest rate since the survey included the question in April 1999.
The company's research shows that 40.6 per cent more surveyors reported a fall in prices than a rise compared with 23.4 per cent in October. This has been attributed to a slowdown in demand, although supply – which continues to fall – is declining at a slower rate than it has done in previous months. New instructions to sell property fell for the sixth month in a row, although the rate is starting to slow.
Surveyors reported that the level of unsold property rose 8.7 per cent compared with a 9.7 per cent increase in October. Consequently, completed sales for the last three months compared with the stock of unsold property fell to 33.1 per cent. Furthermore, price expectations have reached the lowest level since October 1998, when the question was first included in the survey.
Despite the recently reduced interest rate, earlier increases are thought to have exacerbated problems within the housing market, and this has been compounded by the tightening of mortgage lending rules.
Jeremy Leaf of estate agent Jeremy Leaf & Co. said: "Activity stagnated for us in November rather than deteriorating further from the low levels of the previous month. However, new applicants and new instructions are very hard to come by especially those requiring HIPs."
And David Pearse of David W Pearse and Co. also suggested HIPs were an issue. "HIPs are proving very unpopular with sellers with many objecting to the additional costs, however, buyers seem totally disinterested. To date, not one of our offices has received a request for sight of a HIP, yet still we have Government spin doctors proclaiming this as a resounding success," he said.
Prices fell across all regions in England and Wales, with most significant declines reported in the East and West Midlands. Declines were less defined in London and the South West. Most regions in Northern Ireland witnessed a decline, while Scotland was the only region to see a rise in prices.
There may be some light at the end of the tunnel, however, with several mortgage lenders, including Nationwide and Halifax, having announced they will be cutting standard variable rates.
Senior partner at Cluttons, Richard Cotton, said: "A lot of applicants are holding off until the New Year. They feel the market will drop in the fourth quarter." Meanwhile, David Jones of Jones and Redfearn said: "The market remains in the doldrums with first time buyers not yet cottoning on. Now is a good time to buy."
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