Steep fall in house prices!
The slight rise in house prices that we saw filter through in the early part of 2012 has stalled and started going the other way according to Britain’s surveyors. The Royal Institution of Chartered Surveyors (RICS) April figures have reported a decline in house price and a reduction in activity across the country, further evidence that the country is experiencing a double dip recession.
The RICS report shows that 19% more surveyors reported reductions in house prices as opposed to price rises. In the same period, newly agreed sales and number of people moving home were down, and the number of properties sitting on the books of surveyors increased again. The Royal Institution of Chartered Surveyors said that the end of the stamp duty holiday on properties priced below £250,000 was partly to blame along with general slowdown in the economy.
The only positive news was that London managed to buck the trend, with the capital’s surveyors reporting a totally different picture from everywhere else in the rest of the UK. A surprising 86% of London surveyors said prices were either the same or going up. This compares to Wales, where 36% reported a fall in prices, and Northern Ireland, where the figure was 50%.
The figures reported by the RCIS have been backed up by all the major property indices. The Halifax reported an overall fall of 2.4% in April, equivalent to a reduction of £4,000 on the value of an average property. The steep fall in prices signifies the market falling at its fastest rate for almost two years.
Another factor holding back new buyers from entering the market is the decline in the availability of mortgages. With the already strict lending criteria applied by mortgage lenders getting even more stringent, some buyers are finding it near on impossible to get a mortgage without having to find enormous deposits.
But the RICS have qualified their findings by emphasising that 63% of those who took part in the survey, reported no change in prices, and of those that did experience a drop in prices, 81% said the drop was only in the 0-2% range.
The best results were in the Docklands area of East London where they experienced a mini-boom and the W6, W12 and W14 areas of West London where prices are now 20% ahead of the market high we saw in 2007.