The decline in prices is the biggest since 1995, and is a reaction to interest rates rising over the summer period — up three times in four months.
Despite this, it is unlikely that the housing market will experience a deep or prolonged downturn in prices as long as the economy remains stable and people are confident about job security.
Available properties are at the highest recorded level for almost a year, rising by 8 percent over the past three months. 30 percent more chartered surveyors reported a fall than a rise in house prices over the three months to September. Only 12 percent more reported a fall over the previous quarter to August. However, as supply to the market remains tight, stocks of unsold properties remain close to historical lows.
Buyer enquires are down for the fifth consecutive month. Buyer activity has seen some large declines in Northern England and the Midlands, while declines in Southern England, including London are not as large as those recorded during the summer months.
A downturn in sales continues, falling 14 percent over the past year. Looking ahead, surveyors predict a period of stagnation with sales activity levelling out.
Northern England and Wales are static, with the housing boom clearly over. Moderate price falls are evident in Southern England in reaction to higher interest rates.
RICS national housing spokesperson Ian Perry says: ‘The Bank of England is getting what it wanted. The housing market is slowing down with the economy, after consistent interest rate rises over the past year.
‘The medicine is working. The slowdown is desirable from the point of view of market sustainability and may mean that further rate rises are unnecessary for the time being. While consumers keep confidence in job security and the economy we don’t expect large price falls.’
