House prices may have entered their most severe plummet since the property downturn of the early nineties, according to information released by the Royal Institution of Chartered Surveyors (RICS).
The grim assessment by the influential organisation is based on their survey, the results of which were released this morning that showed 49.1 per cent more surveyors found that house prices fell last month than saw them rise.
In the downturn of 1992 the poll showed 60.1 per cent more surveyors had seen a house price drop than a rise. Although we are still a way from that figure today, it is still bleak when it is taken into account that only in November last year the survey showed a figure of 40.6 per cent.
The downturn has been reported all over Britain but the areas most affected are the West Midlands and East Anglia. There have been reports of a slight rise in Scotland.
Public mistrust of the market following the collapse of the subprime mortgages in America and the run on Northern Rock has lead to reluctance in house buying. A stock of properties is building up in estate agent windows, many people are choosing to use multiple agencies in an attempt to shift their homes. It is this build up of supply which is driving down prices.
The lack of buyers is not being helped by the toughening of lending criteria as the banks themselves feel the crunch.
RICS spokesman, Jeremy Leaf, said: “It is clear that the housing market continues to feel the strain of depressed market conditions. The recent credit crunch continues to hit confidence in the market, with Chartered Surveyors feeling the most pessimistic about price expectations since 1998.”
On a more positive note he added; ““However, while underlying economic fundamentals remain sound and the labour market remains strong, large falls in prices remain unlikely. Employment would have to fall sharply before enough supply entered the market to create a significant dip. ” |
