'Stalemate' in market after prices fall for third month in a row

Sunday 18 November 2007 01:00 GMT
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It now seems clear that house prices are falling, says the Royal Institution of Chartered Surveyors (Rics).

Its latest survey of members shows that prices were down in October for the third month in a row. They are now falling at their fastest pace since July 2005, a combination of high prices and five interest rate rises since July last year having helped dampen the once-buoyant UK property market.

First-time buyers have been put off by the general unaffordability of homes relative to average incomes, and lenders are reining in their mortgage offers due to the turmoil hitting international money markets. No wonder, therefore, that enquiries from new buyers have fallen for the 11th month in a row.

"Interest rate rises, the recent credit crunch and the subsequent tightening of lending conditions have all had an impact on demand," said Ian Perry, spokesman for Rics.

Overall, 22 per cent more surveyors in England and Wales in October saw prices fall than rise in their locality. Rics said the fall was especially sharp in Northern Ireland, which has seen an unprecedented property boom over the past three years.

However, Mr Perry added that he did not envisage a full-scale housing crash, describing the current condition of the market as a "stalemate".

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