Market Stabilises – RICS

Prices fell over December, but at their slowest pace in three months, the Royal Institute of Chartered Surveyors (RICS) has reported.

According to RICS? December figures, 37% more chartered surveyors reported a fall in house prices than a rise during December, compared to 46% reporting a decline during November.

The Institute indicated that renewed buyer confidence may be based on the belief that interest rates have peaked.

The number of completed sales last month was equal to November?s figure, marking the first time in nine months sales have not fallen. However, sales volumes remain 30% lower than one year ago, and the growing flow of property coming on to the market, resulting in the highest level of unsold properties on surveyors? books in 18 months, means that surveyors? confidence in the market is subdued. They expect further moderate price falls.

?Speculation that interest rates have peaked seems to have given encouragement to buyers during a period which is traditionally quite weak,? RICS spokesman Ian Perry said. ?With the economy sustaining moderate growth, the conditions for a mild pick-up in the housing market are in place for 2005, though any further significant rise in interest rates will knock back confidence.?

RICS forecasts a modest recovery in house prices across the country, and that steady interest rates and a favourable economic backdrop will lead to a 3% rise in prices in 2005.

Commenting on RICS? figures, Liam Bailey, Head of Knight Frank Residential Research, said: ?We anticipate that prices in most locations in the UK will continue to edge lower over the next few months. We expect that as the spring market moves into the summer, transaction volumes will move upwards and prices will begin to stabilise.?