Revival in house prices still distant

HOUSE prices are unlikely to pick up before the new year, according to the Royal Institution of Chartered Surveyors.

Estate agents were preparing for an improved autumn after signs in August that the market was beginning to move. But recovery has seeped away as consumer confidence waned. 'It is now clear that neither house prices nor market volumes will increase until the new year at the earliest,' says the RICS report on the three months to the end of September, published today.

Nearly 60 per cent of agents said there had been a drop in the number of enquiries and viewings in the period, and just 16 per cent reporting an increase. Prices remained stable in the view of three-quarters of the agents questioned.

Realistically priced houses for sale are in short supply. Any houses perceived as overpriced are being given a wide berth by buyers.

Peter Miller, residential property spokesman for the RICS, said: 'The upward movement of interest rates has deterred some potential buyers but those in employment are still well placed to buy. Local factors are much more important than national trends.'

Many agents reported a split market in their area. Another RICS spokesman, Harvey Williams, said that at the very top of the market - properties over pounds 1m in London and small country estates or homes with five or six acres in the country - buyers were buzzing like bees around a honeypot.

In the Upminster and Havering area of outer London, Parish & Co said prices of larger four-bedroomed houses were increasing, contrary to the trend elsewhere.

In Doncaster, South Yorkshire, Grice & Hunter reported that country properties and modern estate houses priced below pounds 100,000 were selling, but terraced houses, ex-local authority and ex-colliery homes remained difficult to sell unless they were so cheap that they attracted speculators.

Gary Marsh, housing economist at Halifax Building Society, said the housing market started to pick up last year as the economy started to recover. But this year the recovery has been export-led, with consumer spending slowing down, and this has affected the property market.