Fears that the UK could be heading for its worst housing recession since the early 1990s grew yesterday with the release of the latest survey of the market by the Royal Institution of Chartered Surveyors (Rics).
The Rics house-price balance dropped to its lowest level since November 1992 as 49.1 percent more Chartered Surveyors reported a fall than rise in house prices, down from 40.6 in November. A Rics spokesman, Ian Perry, said: "While sentiment seems to have reached its lowest ebb, the underlying economic conditions are different [than in] the early 1990s. Supply would have to loosen considerably before prices see a big dip."
But demand remains subdued, reflected in successive monthly falls in house prices reported recently by the Nationwide, the Halifax and the Department of Communities and Local Government. The suspicion is that buyers are holding off entering the market in the hope that values may weaken further, and that the Bank of England will continue to cut interest rates during 2008.
The tightening up of credit criteria by mainstream lenders and the virtual disappeance of the UK's "sub-prime" sector has also had an impact on demand. The stock of unsold property jumped by 7.1 per cent, following last month's rise of 9.1 per cent.
Surveyors reported price falls across all regions in England and Wales, the heaviest of which were in the West Midlands and East Anglia. Only in Scotland have surveyors reported price rises.Reuse content