By Daniel Hunter
The more optimistic outlook for the residential property market looked to have run out of steam in April as prices edged lower, says the latest RICS (Royal Institution of Chartered Surveyors) UK Housing Market survey.
Across the country, 19 percent more chartered surveyors reported falls rather than rises in house prices. Alongside this, expectations for future prices reached their lowest level this year with a net balance of 17 percent more respondents predicting further drops (from -3 percent).
Demand from potential buyers was relatively flat during April as five percent more surveyors reported increases rather than decreases in new buyer enquiries (from +10 percent in March). Meanwhile new instructions, a good indicator of supply coming onto the housing market, was once again stable as one percent more respondents reported falls rather than rises in new homes coming up for sale. While flat, the level of supply has not seen any significant drops since July last year.
Following the upturn in activity seen towards the expiry of March’s stamp duty holiday, in April transaction levels entered negative territory for the first time since September, as six percent more respondents across the UK reported decreases rather than increases in transaction levels.
Across the UK, London was again the only part of the country to see prices rise, albeit at the slowest rate since the middle of 2011, while the West Midlands and Wales saw the most significant declines with net balance readings of -43 and -39 percent respectively.
Looking ahead, while surveyors’ predictions for future prices saw a notable dip, expectations for transaction levels once again remained positive with a net balance of +15 percent more respondents expecting sales to rise over the coming three months.
RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978. The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.
"With the recent surge in activity brought on by March’s stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall," Peter Bolton King, RICS housing spokesperson said.
"Renewed concerns over the economy and talk of a double dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence. What’s more, the continuing lack of affordable mortgage finance is still hindering many first time buyers who cannot afford to get a foot on the property ladder."
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