RICS survey dampens hopes of sustained growth

After declining for the past three months the number of surveyors recording a fall in prices increased slightly with the balance down to -8.7% from -7.0% in October.

There was also a marginal increase in the balance of surveyors expecting further house price falls to-5.6% from -2.8% the previous month.

Nick Hopkinson, director of property company PPR Estates, said if inflation is factored in house prices will have fallen by more than 25% across most UK regions since 2007.

He said: “Transaction levels remain 50% below that of a functioning market and lending remains heavily restricted to all but the richest buyers as we end 2012. Well over one million households are stuck in negative equity and are now effectively mortgage prisoners in their own homes.”

The more forward-looking indicators have also softened although most still point to a small increase in housing market activity.

New-buyer enquires are still estimated to have increased but with a balance of 10.6% of surveyors who reported that enquiries were increasing this is down on the 17.5% recorded in October.

And the evident reluctance of new buyers to take the plunge and purchase a property is reflected in the fact that the stock of unsold property is still rising and is now at the highest level since the start of the year.

Hopkinson added: “It is difficult to see how Government initiatives to encourage more mortgage lending are either prudent or likely to be effective against such a backdrop. Seller and buyer appetite to do deals is likely to remain very low with 2013 is looking like another year of sales famine for the property market.”

Looking at the regional picture London remains the only area where surveyors recorded price rises.

However the survey revealed some tentative evidence that the differences between the regions are becoming less pronounced.

Compared to a year ago the balance of surveyors reporting price rises in London and price declines in most other regions, is slightly smaller.