Property Market Falters

RICS has reported its first house price falls for August in its latest housing market survey. According to their figures, during the three months to August, for the first time more surveyors ? 12% ? in the UK reported a fall in prices than an increase.

Declining prices, according to the Royal Institute of Chartered Surveyors (RICS), were strongest in London, South East and the Eastern region, followed by the South West. Growth continued in Scotland and the North of England, but a rapid slowdown was apparent in the North West and Yorkshire and Humberside.

Numbers of sales completed are also falling quickly, having declined further in August to the lowest level since November 2000.

RICS insisted that a crash is unlikely thanks to the strength of the economy and, in spite of recent increases, relatively low interest rates. While stocks of properties on surveyors? books have increased since May, they are still historically low, some 12% below levels for the same period last year, showing that the market is still largely in favour of the vendor.

Meanwhile the British Bankers? Association (BBA) reported a decline in demand for mortgages yesterday, saying that mortgage lending rose by £4.4bn in August, the weakest figure since June 2002, and notably lower than both July?s figure of £5.1bn and the recent monthly average of £5.4bn.

David Dooks, BBA Director of Statistics, said: ?Notably weaker mortgage growth in August may be a sign that mortgage demand is moderating in the face of tighter household budgets and a slowing housing market.?