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Rics: Market conditions worst since 1996

Tuesday, 11 March 2008 12:01 AM

The Enfland and Wales housing market is in its weakest condition since 1996, according to the Royal Institution of Chartered Surveyors (Rics).

Findings from the organisation's monthly housing market survey show some 64.1 per cent more surveyors reported a fall in prices than a rise during February - up from 54.8 per cent in January.

This figure is close to the historical low of June 1990 when 64.5 percent more chartered surveyors reported a fall in house prices.

Surveyors reported prices declined at a faster pace than in the previous month across all regions in England and Wales, except for the north.

Falls in the price balance are being driven by weakness in the demand for property rather than new supply coming onto the market, argues Rics.

Demand has been slack during 2008 to date as buyers delay making purchases amid unpredictable market conditions and find it harder to secure credit amid tightening lending conditions.

In further bad news, the net balance of surveyors reporting a drop in the number of new buyer enquiries now stands at 37 per cent - which is the worst reading since October 2007.

"Confidence in the market is clearly having an effect on prices. A combination of a lack of available finance and weakening demand is causing a slow drop in capital values," explained Rics spokesman, Ian Perry.

"While there is very little new supply coming onto the market, it is unlikely there will be significant price drops in the short term but the build up of unsold stocks will encourage buyers to negotiate lower asking prices."

Rics also finds completed property sales for the quarter to February increased fractionally to 24.4 per surveyor - up from 24.3 in January.

The stock of unsold property on surveyors' books jumped by 8.5 per cent on the month and by 48.6 per cent on the year - the highest annual growth rate since December 1989.

Estate agents now have an average of 92 properties on offer, up from 84.7 in January.

Also the sales to stock ratio is at the lowest level since September 1996 - as stock of
property on the market continues to surge.

Finally, new buyer enquiries declined for the fifteenth consecutive month and at the fastest pace since October 2007.

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