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House prices: Surveyors expect property values to fall

Doors
Image caption Property prices can differ depending on location

A bigger proportion of surveyors are expecting house prices to fall in the coming months than at any time since March last year.

Some 38% more of those asked, in the survey by the Royal Institution of Chartered Surveyors (Rics), expected prices to fall rather than rise in the next three months.

They said that property values fell for the second consecutive month in August.

Scotland was the only part of the UK to buck the downward trend in prices.

The Rics survey has a relatively small sample size of 259 professionals, but has mirrored many of the other polls on house prices.

They said that the drop in prices was the result of a combination of more sellers returning to the market but less interest from buyers.

"The latest set of results suggest prices in many parts of the country may be slipping but this does appear to be encouraging hopes amongst surveyors that sales levels could begin to pick up as a result," said Rics spokesman Jeremy Leaf.

"Looking forward, our price indicators are telling a mixed story which is consistent with the uncertainty hanging over the economy, the low level of interest rates and the lack of new house building."

Government figures

Fresh data from the Department of Communities and Local Government showed that UK house prices fell by 0.3% in July compared with the previous month.

The figures, which traditionally lag behind other house price surveys, also revealed a slowdown in annual house price inflation. This stood at 8.4% in July.

The average home cost £220,240 in England, £170,782 in Scotland, £147,770 in Northern Ireland, and £157,166 in Wales, the survey showed.

There was also a North-South divide in England, with prices in the East, in London, in the South East and in the South West all higher than the UK average.

Most polls about property values have found that prices hit a plateau in the summer.

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Media captionSimon Rubinsohn from RICS says surveyors are reporting modest price falls

Mortgage market

Fresh statistics from the Financial Services Authority (FSA) have confirmed the relatively stagnant state of the UK mortgage market for those unable to offer a large deposit.

During the April-to-June quarter, just over 2% of new advances were given to those with a deposit of 10% or less, the City watchdog said.

However, low interest rates meant that the number of homeowners in arrears on their mortgage payments fell.

There was an 8% fall in the number of new arrears cases in the second quarter of the year, compared with the previous three months. This figure has been falling for the past 18 months.

The number of properties being repossessed also dropped, down by 5% in the second quarter of the year and at the lowest level for two years, the FSA said.

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