RICS: House prices fall further in December

Surveyors continued to report price falls in December, even after adjusting for the time of year, according to the latest data from the RICS.

The Institution’s December house survey showed that a balance of 39% more surveyors reported price falls than rises in December, slightly better than the -44% figure in November. The falls continued in all regions, with London performing least worst, and the West Midlands having the biggest falls.

However, the latest data did also contain some evidence of stabilisation in the market towards the end of the year, largely due to a decline in the number of homes on the market. The average number of transactions per surveyor rose from 14.8 to 15.2, while the number of new instructions from sellers reduced from a balance of -4% to -14%.

Expectations of the number of future sales also improved, up from a balance of 6% to 8%, but surveyors still expect prices to fall. However the number expecting falls reduced sharply, from a balance of 41% expecting falls in November, to 29% in December.

RICS spokesperson, Jeremy Leaf, said sales had remained stable despite December’s bad weather. He said: “While lack of supply, and more importantly demand continues to impact heavily, surveyor sentiment does appear more positive for the coming months. The key issue now is mortgage finance. However, with commentators suggesting lending constraints are unlikely to be eased, it is hard to envisage a meaningful increase in sales levels in the near term.”

David Newnes, estate agency managing director of LSL property services, said: “The flattening of house prices looks set to continue through 2011. The public spending cuts, along with the possibility of rising interest rates, are weighing on the minds of lenders, which has caused a finance drought. Sellers know this and have been holding off bringing properties to the market, hoping for prices to rise later in the year.”