House price growth has turned negative in August, with a sharp fall in demand, according to the Royal Institute of Chartered Surveyors (RICS).
RICS’ latest UK housing market survey found 1.8% more chartered surveyors reported a fall in house prices than those reporting a price rise, down from 10.8% reporting a rise in July. This is the first time the RICS survey has showed negative house price growth since October 2005.
The survey shows the downward trend is most widespread in the West Midlands, North West and East Anglia, but London has seen little effect and continues to show strong growth.
Demand for homes continued to decline in August, with new buyer enquiries falling for the ninth successive month. Overall, 37% more chartered surveyors reported a fall than a rise in new buyer enquiries, compared with a 27% difference in July.
The survey also found a reluctance to sell property in the current market, with new instructions to sell declining for the third consecutive month. Stock of unsold property on surveyor’s books is now 10% lower than a year ago.
RICS points out that the number of four bedroom properties on the market has fallen by 51% compared with last year, possibly indicating a reluctance to sell due to HIPs.
Commenting on the housing market’s short-term future, RICS spokesman Ian Perry says: “The market will soften further, going into the autumn, reducing some impetus from those that have been chasing a rapidly moving target. HIPS have reduced the number of four bedroom family properties coming onto the market, making family homes even more difficult to purchase.”
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