By Jason Theodorou
Property professionals expect house prices to fall in the next few months, due to widespread economic uncertainty and increased home sales. The Royal Institution of Chartered Surveyors (RICS) said that enquiries from new buyers fell in July. The survey showed that interest from buyers fell for the second time since October 2008.
The RICS said that in June, 4% more of its members expected prices to fall compared to those who believed that they would rise. The negative outlook is a contrast to last month, when surveyors predicted price rises. At least 27% of surveyors saw a rise in new instructions since mid 2007, which shows that the supply of homes for sale is increasing.
Buyers are unsure about the outlook for the economy in the next few months, as government spending cuts and tax increases begin to have an impact. But sellers have been returning to the market after the retirement of the unpopular Home Information Packs (HIPS) by the coalition government.
Jeremy Leaf, a spokesman for RICS, said: 'A shortage of stock has been one factor holding back transaction activity in the housing market but the abolition of Hips is helping to belatedly address this issue'.
'This is likely to be reflected in higher sales numbers over the coming months. However, with supply of property now beginning to outstrip demand there is a risk of some modest slippage in prices during the second half of the year'.
A forecast by accountants Pricewaterhouse Coopers has suggested that house prices may not reach the levels seen at the peak of the market in 2007 for a further decade.
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