House prices fall for second month

House prices fell for the second consecutive month in March, shattering hopes of a surge of activity in the run-up to Easter, the Royal Institution of Chartered Surveyors said today.

Although the actual scale of the fall was only slight, its impact was magnified by the fact that it came at a time that is traditionally busy for estate agents.

However, Rics said the survey was carried out before the end of the Iraqi war, which it said could contribute to renewed activity in the coming weeks.

Taking seasonal factors into account, the number of surveyors reporting falling prices outnumbered those witnessing price rises by 25 per cent.

This extended the fall seen in February and marked a fresh eight-year low, Rics said. The steepest falls were in London, the South-east and the south-west but every region of England and Wales suffered a slowdown. Over the past three months, the balance has fallen by 66 points, almost identical to the biggest drop seen in any quarterly period since the series began in 1982. Rics said the numbers of buyer enquiries and sales were down while sellers were rushing to put their homes on the market. "The number of homes for sale rose as owners, suspecting the market has peaked, tested the feasibility of an early sale at a high price," Rics said. "But at the same time sales slowed as many buyers hung on to see if prices fell further."

Ian Perry, Rics' chief housing spokesman, said: "Unemployment and lending rates remain low, and with good Easter weather and the end of the Iraqi war in sight, we have the ingredients for a bounceback in the market later in the year."