RICS survey suggests more housing gloom to come as market stagnates and prices drop.

An increase in supply has pushed house prices down for the second consecutive month, according to the latest RICS survey.

Around 32% more chartered surveyors reported prices falling rather than rising in August - the biggest negative reading since May 2009. According to the RICS the downward trend was driven by a combination of increased supply and a moderation in demand from buyers. The drop in prices is happening everywhere except Scotland.

Buyer demand, measured by new buyer enquiries, fell from -10 to -17, the lowest reading since January 2010.

Commenting, RICS spokesperson, Jeremy Leaf said: “The latest set of results suggest prices in many parts of the country may be slipping but this does appear to be encouraging hopes amongst surveyors that sales levels could begin to pick up as a result.

“That said, there can be little doubt that the restrictive attitude to the provision of mortgage finance will continue to limit transaction activity in the market. Looking forward, our price indicators are telling a mixed story which is consistent with the uncertainty hanging over the economy, the low level of interest rates and the lack of new house building.”

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