More members of the Royal Institute of Chartered Surveyors (RICS) are now seeing falling rather than rising prices says their first negative report since July 2009.
This weakening trend is being driven by increasing supply and falling demand with anecdotal evidence suggesting that the rise in properties for sale has resulted from buyers testing the market following the abolishment of HIPs in May, rather than distressed selling.
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Transaction levels remained largely unchanged in May bringing stock levels higher than they have been for some time.
Regionally surveyors are reporting more price increases than decreases in London and the North West while the picture is stable in Scotland and the South West. Most other areas including Northern Ireland are seeing prices fall, the report found.
Ed Stansfield from Capital Economics commented that this unravelling of stock could mean further house price falls lie ahead: ‘The dip in buyer enquiries since the turn of the year has begun to drag house prices lower. We expect the restricted level of mortgage credit, together with rising unemployment and the squeeze on household incomes to mean that house prices end the year down by 5% and continue to fall in 2011,' he said.
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