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UK: House price fall quickens and outlook grim

  House prices fell at a faster pace in January than in December and the outlook for prices turned gloomier as the number of completed home sales fell, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors’ seasonally adjusted price balance fell to -76 in January from -74 in December, suggesting the housing market remains in a very depressed state.

And surveyors expect house prices to keep falling. The balance of those reporting they expected prices to fall against those forecasting a rise slipped to -88, its lowest since RICS started polling for this information in 1998.

Completed sales per surveyor also fell to a survey low of 9.9 from 10.0 and the average number of homes for sale on surveyors’ books fell to 75.4 from 77.9 as owners opted to rent out their homes rather than sell.

RICS said that took stock levels in January down 10.4% from a year ago, the first annual decline since October 2007.

Still, there were tentative signs that the Bank of England’s aggressive interest rate cuts coupled with heavy house price falls may be helping to revive interest among potential homebuyers.

RICS said enquiries from new buyers rose for the third month running and sentiment about the outlook for sales turned positive in January. “The latest cut in interest rates may improve confidence for those on the margins, encouraging buyers looking for more attractive finance deals,” said RICS spokesman Jeremy Leaf. (Reuters)