Housing boom ends after price fall

The latest report from the Royal Institution of Chartered Surveyors has revealed that the UK housing market may be on the road to a sharp downturn.

Of the surveyors polled, 25% reported that house prices had fallen in the first quarter of this year, indicating that the housing boom was at an end.

The latest RICS survey, published today, showed that average house prices in England and Wales have fallen for the second month running, confirming the stall in the housing boom reported last month. The report also revealed that buyer enquiries and sales are down.

Actual prices, unadjusted for seasonal variations, fell only slightly in March, but the decline is more marked when the time of year is factored in - the run-up to Easter is traditionally one of the busiest and most optimistic periods in the housing calendar. RICS members’ confidence in the market is also low.

RICS housing spokesman Ian Perry said: “The national market is undergoing a definite slowdown, which is good news for first time and less well off buyers in the South, but underlying conditions are not as gloomy as one might think.

Unemployment and lending rates remain low, and with good Easter weather and the end of the Iraqi war in sight, we may have the ingredients for a bounce back in the market later in the year.”

The number of homes for sale rose in March as owners, suspecting that the market has peaked, tested the feasibility of an early sale at a high price. But at the same time sales slowed as many buyers hung on to see if prices fell further.

Price falls and a slower market are concentrated mainly in the southern regions. The average figures disguise stronger conditions in Northern areas and Wales where prices are still rising, albeit at a reduced rate.

(SP)