House prices begin to fall
Published: 14-Sep-2007
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New figures suggest that house price growth turned negative in August for the first time in nearly two years.
According to Rics, 1.8 per cent more chartered surveyors reported a fall than rise in house prices during the month. This compares to 10.8 per cent more reporting a rise in July and is the first negative indicator since October 2005.
In particular, members in the west Midlands, the north-west and East Anglia reported house prices were falling significantly.
However, London remained unaffected by credit market turmoil and remains the region with the strongest price growth in England.
Rics spokesman, Ian Perry, suggested that many people could be planning to remain in rented accommodation for longer until they see what direction the market is moving in.
He explained: "Potential house buyers have become far more cautiousas they wait and see what affect interest rate rises will have on household finances.
"Affordability is at its most stretched in over a decade and many will worry that rising mortgage repayments will prove a step to far."
Recently, Rics suggested that this 'wait and see' approach meant that demand for rental property had reached record levels.
"Current economic uncertainty has created an ideal platform for buy-to-let investors to cash in on rising rental levels," commented Rics' Jeremy Leaf.
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