House prices fell slightly less sharply in the three months to October than in the three months to September, a survey showed on Tuesday, but home sales hit the lowest in at least 30 years.
The Royal Institution of Chartered Surveyors said its house prices balance rose to -81.8 last month from -84.5 in September, above forecasts for a decline to -85.6, but still indicative of widespread declines in prices and a very weak housing market. RICS said the average number of sales per surveyor over the three months to October fell to 10.9 from 11.5 -- the lowest since the series began in 1978 and 53.6% lower than the same period last year. “The general lack of mortgage finance remains a major blockage in the housing market for a large majority of would-be buyers,” said RICS spokesman Ian Perry.
RICS said the sales to stock ratio, a gauge of future price moves, fell to its weakest since December 1992 at 13.5 compared with 14.1 in September. The figures reinforce a raft of evidence depicting a slumping housing market -- after a decade in which house prices trebled -- as the credit crisis drives Britain into its first recession since the early 1990s. But the slight improvement in the headline RICS balance may suggest some stabilization at low levels following the government’s bank rescue plan and coordinated interest rate cuts from major central banks in October.
The Bank of England also slashed interest rates by 1.5 percentage points this month, bringing borrowing costs down to 3% -- their lowest level in more than half a century -- in an effort to stave off a deep recession. The RICS survey showed surveyors’ sales expectations rose to their highest level since March 2007. However, economists say a housing market recovery remains a long way off, especially given an increasingly gloomy outlook for the wider economy.
London, once the main driver of house price inflation, is suffering heavily, according to the RICS survey. London agents reported an average of just 6.4 sales over the last three months. (Reuters)