LONDON, Nov 12 (Reuters) - British house prices are falling at their fastest pace since mid-2005, a survey from the Royal Institution of Chartered Surveyors showed on Tuesday, providing further evidence that the once red-hot market is cooling fast.
The survey comes less than a week after mortgage lender Halifax reported house prices fell for a second month in October -- the first time prices have fallen two months in a row since the property market slowdown of 2005.
The RICS house price balance for October fell to -22.2 from a downwardly revised -14.9 in September. Analysts had forecast a reading of -20.
"While by no means heralding a market meltdown, the ongoing cooling of this sector adds further weight to the argument in favour of the Bank of England adopting an easier policy stance before too long," said Richard McGuire, strategist at RBC Capital Markets.
Details of the survey were also gloomy. Inquiries from potential buyers fell for an 11th straight month and surveyors were more pessimistic about the price outlook than at any time since April 2003.
House prices in Britain have more than doubled in the last five years, making it hard for first-time buyers to get a foot on the property ladder.
PAST THE PEAK
While the pace of recent price rises was widely considered unsustainable, some analysts are voicing concern that financial market turmoil, tighter lending conditions and falling confidence might turn a healthy slowdown into a more prolonged downturn.
Repossessions have already started to rise and estate agents say demand has shrunk noticeably over the past few months.
"Past interest rate increases combined with a tightening in mortgage lending conditions have prevented many would-be buyers from getting on the housing ladder," the RICS survey noted.
http://www.guardian.co.uk/feedarticle?id=7072960 |
