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UK Nov house price balance -49.1
Tuesday, January 15, 2008
LONDON (Thomson Financial) - The proportion of chartered surveyors in the UK reporting lower house prices in November stood at its highest in over 15 years, as the housing market was hit by both high interest rates and the credit crunch, a leading industry group said today.
In its monthly survey of the sector, the Royal Institution of Chartered Surveyors said a balance of -49.1 pct of its members reported lower house prices during the month.
This is the fifth successive month that a majority of surveyors have reported lower house price increases and is the biggest negative since November 1992's -60.1 pct.
The December balance is also worse than market expectations for a weakening in the balance to -45 pct from October's -41 pct.
"The housing market is clearly feeling the pinch from the credit crunch and the round of interest rate hikes in 2007," said RICS spokesman Ian Perry.
However, he added that though sentiment is at a low, a crash in house prices is unlikely unless there is a massive increase in the housing supply.
"The underlying economic conditions are vastly different to what the country experienced in the early 1990s," said Perry.
"Supply would have to loosen considerably before prices experience a significant dip," he said.
This comes as RICS reported a balance of 4 pct of surveyors reporting a rise rather than a fall in new instructions, compared with -7 pct in November, the first time this has been positive since May 2007. The looser supply is due partly to the extension of compulsory Home Information Packs to all home sellers.
Stocks of unsold property on surveyor's books rose by 7.1 pct, following last month's rise of 9.1 pct.
The stock of unsold property per surveyor rose to 76.9 in December from 71.8 in November. Year on year, they have increased 18.3 pct, the biggest increase since July 2005.
New buyer enquiries also remains subdued, with 25 pct more surveyors reporting a fall than a rise, down from 31 pct in November.
The balance of newly agreed sales declined for the seventh month running, with 21 pct more surveyors reporting a fall rather than a rise.
Surveyors reported price falls across all regions apart from Scotland, East Midlands and North West. The most prominent falls were in the West Midlands and East Anglia.
Their confidence in the price outlook also deteriorated further, reaching the lowest level since records began in October 1998.
The largest falls in confidence took place in London, the South West, and East Anglia.
