The balance of surveyors reporting house price falls rose for the first time since April. 84.2 percent more Chartered Surveyors reported a fall than a rise in house prices, an increase from 81.8 percent in August. Meanwhile the continued inability of many to secure mortgage finance is reflected in a further drop in transactions. The average number of transactions per surveyor (over the last three months) is now at 11.5, the lowest figure since the survey began in 1978. London is the worst hit region with Chartered Surveyor estate agents reporting only 8 sales on average over the past three months.
Buyer enquiries rose to the highest net balance for 16 months. 17 percent more Chartered Surveyors reported a fall than a rise in new buyer enquires compared to 27 percent in August. Sellers have been forced to drop asking prices to more realistic levels but even so the gap between asking and selling prices continues to widen. Cash rich investors are waiting to pounce on bargains and take advantage of an ever weakening market. The South West has shown the greatest increase in demand with a net 12 percent of Chartered Surveyors reporting a rise in new buyer enquiries, the highest figure in the region since May 2007. The South West house price boom has traditionally been connected to the growth in holiday lets and second homes and investors are closely watching those struggling at the margins.
New instructions to sell property stayed in negative territory with 14 percent more Chartered Surveyors reporting a fall than a rise, a drop from 2 percent in August. With the decline in house prices unlikely to abate in the near term and the likelihood of achieving a sale a distant memory, many are placing their property on the market for rent or sitting tight while the financial turmoil continues. The market has still yet to experience significant numbers of forced sales but surveyors are surprisingly optimistic that sales will increase over the next three months. For the first time since June 2007 the net balance of surveyors expecting sales to improve turned positive.
Commenting, RICS spokesperson Jeremy Leaf said: "The recent turmoil in the financial markets has dented confidence further but yesterday's announcement by the Government that the re-capitalisation of banks will be accompanied by increased lending to home owners, raises the possibility that the lack of mortgage finance that has so damaged the housing market might be eased. As it stands, only those with significant finances are in a position to access the market. The housing market continues to hold its breath and unless mortgage liquidity improves, the market is likely to remain a dormant beast for some time to come."
