Terror attacks caused slowdown in UK housing market

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The Independent Online

The housing market suffered a slowdown in the wake of the 11 September terrorist attacks, a leading industry body said today.

The housing market suffered a slowdown in the wake of the 11 September terrorist attacks, a leading industry body said today.

House price rises in England and Wales slowed last month to their lowest level since April, the Royal Institution of Chartered Surveyors said. The number of inquiries from prospective buyers fell away "sharply" in the days following the attacks on New York and Washington. However, some surveyors reported a pick-up towards the end of last month.

The number of firms reporting price rises outnumbered those witnessing falls by 38 per cent, compared with 49 per cent in August. This was the lowest level since April and was the second consecutive monthly fall. The average number of homes on agents' books rose to 75 (up 4 per cent), the highest since October 2000, and a sign that sellers were trying to avoid a market downturn.

Ian Perry, Rics' national housing spokesman, said he had originally forecast a downturn in the autumn, coupled with recovery in the early part of 2002. "We can now expect to see that recovery delayed until the spring or possibly the summer of next year," he said.

Surveyors expect prices to fall over the next three months, the first time they have forecast a drop for almost a year. The survey also revealed a north-south split with southern England showing a more marked slowdown in prices, which Rics said reflected the recent surge. But prices in the Midlands, the North and Wales held up. In the South-east the index fell so steeply it was within a whisker of recording a fall in prices although Rics said this was mainly due to seasonal factors.

The regional split was echoed by anecdotal evidence. Andrew Pridell, of Clifford Dann in Sussex, said the market closed down for a fortnight after 11 September. "Buyers and sellers are nervous and no one is rushing in," he said. But a spokesman for Abson Blaza Property Services in Wakefield, West Yorkshire, said: "There are no negative factors affecting the housing market in this area, with good enquiries and sales being achieved."

But Mr Perry said mortgage rates, currently at a 40-year low, had supported the market.

There was more bad news from the industrial side of the economy with car production falling 5 per cent in September while the 21 per cent surge in August was revised back to 13 per cent. Economists said this meant hopes of a continued revival in manufacturing output had been dashed. Meanwhile, an index projecting future economic activity said the economy had already reached a turning point and growth would probably accelerate in the first half of next year. The so-called "leading indicator" compiled by NTC Research rose for the 11th straight month in September to its highest level since December 1996.