House Prices Slowed as the length of time on the market grew during November say the Royal Institute of Chartered Surveyors

Growing affordability constraints and uncertainty as to the direction of the housing market have been reflected in a slowdown in sale transactions. House Price inflation also slowed down with a total of 48% of chartered surveyor estate agents, reporting lower house prices in the three months to November.

However, there are no signs of panic on the market – RICS report buy-to-let landlords showing few signs of panicking. RICS believe that should this sector start to panic, the housing market will see further falls in prices. For now, RICS report that many landlords are content to maintain their investments.

Results from the RICS housing survey suggest that housing market weakness is likely to be sustained into the New Year as interest rate rises over the summer and autumn months are still feeding into weaker demand. Surveyors reported accelerating price falls into October, reaching the fastest pace in 9 years.

New buyer enquiries and mortgage demand have weakened substantially, with Bank of England figures showing mortgage approvals declining for the fifth consecutive month in October, hitting the lowest level for over four years. Higher interest rates have not only affected demand but also resulted in some affordability problems for existing homeowners.

RICS December Report

21 December 2004