New figures show that house price growth was negative in September for the second consecutive month.
A survey from RICS (the Royal Institution of Chartered Surveyors) reveals that, although 3.3 per cent fewer chartered surveyors posted a fall than those reporting a rise compared with figures for August – which saw the fastest decline since September 2005 – 14.6 per cent more reported downward trends than upward.
Scotland saw the strongest price growth, while the most significant declines were reported in East Anglia, Wales and in the Midlands.
However, the institute found that surveyor confidence in both sales and prices has fallen further, reaching their lowest levels since March 2003 and May 2005, respectively. This has been linked to recent interest rate rises and pressure within the financial markets.
For the tenth consecutive month, new buyer enquiries declined, with September seeing the fastest rate of decline since March 2003. According to RICS, 51 per cent more surveyors reported a fall than a rise.
RICS spokesman Jeremy Leaf said: “The combination of rising interest rates, the introduction of HIPs and volatility in the financial markets, resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers.”
Meanwhile, new instructions to sell property declined for the fourth consecutive month at the fastest rate since June. The number of chartered surveyors reporting a decline rather than an increase in new instructions rose 21 per cent. London was the only UK region to report an increase.
The combination of lower demand and more constrained supply led to a tightening of market conditions. Although conditions have improved since the March highs, the September ratio of completed sales compared with the stock of unsold property was higher than the long-run average of 37.2 per cent.
“Some would-be buyers are turning to the rental market whereas others, conscious that the next move in interest rates is now likely to be down rather than up and market meltdown is highly improbable, are seizing the opportunity to negotiate with more flexible vendors in a less competitive market-place," concluded Mr Leaf.
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