Lack of housing supply keeps prices from falling dramatically

countryside news and country lifestyle: Lack of housing supply keeps prices from falling dramatically

House prices are still falling as the latest RICS study says dramatic reductions in prices are being prevented by an ongoing lack of supply.

Tuesday, 13 May 2008

Holly Kirkwood


House price falls were reported by as many as 95.1% of chartered surveyors in April says the latest report from the Royal Institute of Chartered Surveyors (RICS), an increase on the 79.4% recorded in March.

Regionally, the picture is particularly depressing for East Anglia, the North and the North West, while in Scotland the majority of surveyors have now also recorded a fall for the first time in this cycle.

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However RICS was keen to point out that prices are not falling fast and the reasons for this, the first being a lack of supply: ‘Large numbers of distress sales have not yet appeared in the market place and, while mortgage arrears remain low and the employment situation remains strong, the lack of supply will continue to prevent large declines,’ the report says.

RICS spokesperson Ian Perry added: ‘Although most surveyors are now seeing price declines, the extent of the fall, is at this stage, quite modest. The real issue is the collapse in the number of housing transactions. This has very real implications, not just for the property industry but also the high street and the wider economy.’

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