House prices fall as property market hits stalemate

House prices fell further, demand failed to pick up and sellers remained reluctant to put property on the market in June, according to the Royal Institution of Chartered Surveyors.

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by Victoria Bischoff on Jul 12, 2011 at 00:01

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House prices fall as property market hits stalemate

House prices continued to fall in June, as demand failed to pick up and the supply of new property fell back, pushing the market into a state of stalemate, according to the Royal Institution of Chartered Surveyors (Rics).

The report showed that demand has been broadly flat for six months – something surveyors largely put down to the difficulties people are experiencing in selling their properties or getting a mortgage.

With uncertainty over the economy deterring sellers from putting their properties on the market, overall activity levels barely changed in June and the average number of completed sales per surveyor in the three months to June remained identical at 14.8. Surveyors did however note that properties are still selling, but only if priced realistically.

Alan Collett, housing spokesperson for Rics, said: ‘The housing market was pretty flat during June. Interest in purchasing property remains relatively low across much of the UK and the volume of new stock coming to the market has slackened’.

‘With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue. London, however, remains a market apart with both sales and prices showing a greater degree of resilience,’ he added.

Looking ahead, 27% more surveyors expect house prices to continue falling rather than rise over the next three months. Sales expectations among surveyors however improved somewhat.

Nicholas Ayre, director of UK buying agent Home Fusion, said: ‘And so the tumbleweed continues to roll through the UK's property market. While a subdued May was blamed on Bank Holidays, as new buyer enquiries dwindled and sales slowed, there are no such excuses for June which remained stubbornly inert’.

‘Yes, there are great buying opportunities in the market right now, but you need confidence, you need an impeccable credit history and you need a big enough deposit. Few people have all three. Rics talk about a stalemate. I'd be inclined to say checkmate,' he added.

Rics' findings mirror a report by Hometrack from earlier this month, which said house prices fell 0.1% during June. In contrast however, Halifax claims house prices rose 1.2% last month, while Nationwide reported prices remained flat.

In our video 'Why are there so many house price surveys' we explain how house prices can seemingly be up, down and flat all at the same time.

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7 comments so far. Why not have your say?

Bette keep renting then

No point selling - you will not find a buyer and will get a lousy price

With interest rates on the floor many can afford to hold property for years and years if need be

No point buying - you will lose your life's savings when property prices fall

Stay out of the sales market and rent instead - you know it makes sense

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"House prices can't fall much, there's a shortage". Believe that and you will believe anything. The population hasnt changed that much since 30 years ago when you could buy a house for £6-10,000. Greed and panic has caused the bubble. House prices will drop as people lose their jobs, interest rates go up and the government close down huge organisations causing large pockets of unemployment in a particular area. Plus banks are still anal about lending. A drop of 40% is definitely on the cards in my humble opinion. Trouble is, people can only remember the price boom and have a mindset that property can only go up. The only thing stopping a plummet is that people are not putting their houses on the market as they dont want to lose money. What happens when they dont have a choice?

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We've been waiting patiently for a dream house that is being occupied by some poor family being strung along in mortgage forbearance to eventually default and get repossessed. It's doing no one any favours keeping people in houses they can't afford, wasting all their money on mortgage interest when they could start afresh renting for less, and the banking industry could take a painful but necessary cleanse. It's just like Greece, kicking the can down the road. The only ones who win are bank bondholders, shareholders and employees.

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I haven't noticed the money sellers are requesting for their property going down. They are only falling in real terms when you include inflation in the calculation, but not when you just compare to multiples of salary. The BOE needs to turn up the interest rate knob to get things moving at the moment everything is stuck. Interest rates are low so people don't need to sell and the prospect of any falls means the large section of speculators who were borrowing as much as they could to but the most property they could has disappeared. Added to the ever escalating home fuel bills, to potentially thousands a year, people are going to prefer a small energy efficient place to a large heat sink.

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I totaly agree with Landlord X

We have futher to go prices will drop more

So if your a FTB keep the money in the bank

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I wish the so called property 'experts' would make up their minds. One minute I read Halifax and Nationwide are claiming house prices are rising, along with rents, both statements are b***s***. It does not help when CityWire jump on the band waggon repeating the same. If you take London and the home counties out of the reckoning, prices are falling in both sectors in many areas of the UK.

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Meltonian

Jul 13, 2011 at 09:19

In Spain Bancaja have put their 'properties in possession' on their website at up to 60% discount to try to liquidate. At present there are 852 flats and apartments available. There's no reason why it might not happen in the UK.

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