Royal Institute of Chartered Surveyors Survey on House Prices

Royal Institute of Chartered Surveyors Survey on House Prices

by David Redmond on 10 Nov, 2011

The Royal Institute of Chartered Surveyors’ (Rics) monthly survey provided an interesting read at the end of 2010. Despite property prices falling in general, the market has continued to slow.

The survey suggests that despite the recovering economy, demand for homes remains low. Estate agents cite a dearth of first-time buyers and anxiety about the potential impact of the government’s spending cuts as the key reasons behind the property market slowdown.

First time buyers are having a particularly hard time with mortgage companies as greater deposits are required, and home loans are rationed. Meanwhile, many people are reluctant to part with the large sums of money required to buy a home as they worry about the impact that government cuts will have on their livelihood and income.

After falling sharply during 2008, the UK property market recovered quickly during 2009 thanks to ultra-low interest rates and a lack of available homes for sale. However, the end of 2010 saw a fresh downturn.

In the last quarter of 2010, only 4% of the 295 firms contacted said that prices in their area had risen, whilst 53% said they had fallen.

Rics said its members expected house prices to continue falling in the early months of 2011 but that firms were more upbeat about the potential for sales.

Even so, with the current difficulty of extracting finance from mortgage companies, the widespread anxiety being felt in the face of Coalition cutbacks and the cutbacks actually kicking in during 2011, it takes a special kind of optimist to predict anything beyond a modest upturn in the property market over the next year.

As Jeremy Dell, a surveyor in Oswestry, Shropshire, put it: “The housing market is only a shadow of itself in 2007. The economics indicate a long downward spiral.”

 

About the Author

David Redmond


David Redmond is a Partner of Don Gilliard Finance Group. He is a fee-only, independent financial advisor and financial planner. For over 15 years, he has been helping individual investors and their families realize their investment goals.