Lack of buyers pushes property prices lower

Homeowners face a bleak start to 2011, as the nation's surveyors report a further weakening in demand with a prediction that property values will continue to fall.

"Lack of demand from buyers continues to stifle the market, and new buyer enquiries fell for the sixth consecutive month,"a spokesman for the Royal Institute for Chartered Surveyors said on the key issue of whether buyers are returning to purchases. "First-time buyers are in short supply, as large deposits required by lenders and availability of mortgage finance keep many from getting a foot on the property ladder."

Some 44 per cent more chartered surveyors surveyed by the RICSreported that prices fell rather than rose in November, a slight improvement on October's net balance of -49 per cent – but also confirmation that any sustained recovery in property values may be a long way off.

Unsold properties remained on surveyors' books for longer inNovember, the average number of sales per surveyor decreased, and the sales-to-stock ratio fell to its lowest level since May 2009.

The slow market will provide little seasonal comfort to house builders and homeware retailers. On Monday, property website Rightmove said sellers had adjusted their asking prices down by 3 per cent, or about £7,000, in November. The Nationwide said earlier this month that prices slid by 0.3 per cent during November, after a 0.7 per cent fall in October, the sixth month of declines. The Halifax house price index shows a similar pattern. Some City experts are predicting falls of about 10 per cent over the next year.

Only the south-west of the country is, so far bucking the trend with a serious net positive balance on activity. The West Midlands and Northern Ireland registered the worst data.