House prices fall across the UK (except in London)

House prices continued to fall in December but activity in the market remained relatively firm, according to the Royal Institution of Chartered Surveyors (Rics).

Some 16% more surveyors reported that house price fell rather than rose in December, down from 17% in November and 24% in October. 

London remained the only area to see prices increase, while West Midlands and Yorkshire and Humberside reported the biggest drops of 47% and 43% respectively.

Looking ahead, 21% more surveyors said they expect prices to continue falling over the next three months.

Activity in the market meanwhile remained ‘relatively firm’, said Rics, with an increasing amount of new stock making its way onto the market which suggests sellers are returning. The capital saw its supply of new homes increase to its highest level since January 2005.

Demand across the UK also remained fairly steady, with 2% more surveyors reporting that new buyer enquiries rose rather than fell.

The number of sales completed by each surveyor however dipped slightly from 15.4 to 15.2 in the three months to December. Sales expectations for the coming three months also fell, as surveyors warn that transaction levels may be hindered by unrealistic price expectations.

Ian Perry, housing spokesperson for Rics, said: ‘While it’s encouraging that sales activity held up relatively well towards the end of the year, continuing problems with the economy and the ongoing instability in the eurozone seem to be weighing heavily on the UK housing market and expectations for the coming months are fairly subdued’.

‘The increasing number of prospective sellers who placed their homes on the market in December is a positive development as a lack of stock has been a big issue in some parts of the country but with sales expectations remaining flat, it is important that vendors are realistic in their pricing if they wish the sale to go through in good time,’ he added.

Last week figures from Halifax showed that house prices fell 0.9% in December and are 1.3% down on the same period last year, adding that the outlook for 2012 is uncertain.