House prices expected to fall, say surveyors

Surveyors are expecting house prices to dip in the coming months, prompting a call for sellers to be realistic about asking prices.

Some 23% more surveyors asked in a survey by the Royal Institution of Chartered Surveyors (Rics) expected prices to fall rather than rise in the next three months.

It found that a similar proportion reported that prices fell in July.

A separate index suggested that prices had been relatively stable.

The Office for National Statistics report found that UK house prices were up 2.3% in the year to the end of June, and up 0.5% from May to June.

Bad weather

London has largely bucked the trend of price falls and has seen relatively strong price growth, the two reports said.

Surveyors said that price falls were most likely in the west of England, the East Midlands, and Yorkshire and Humberside.

The group said that buyers were still finding it difficult to access mortgage funding, but interest had not dipped as a result of the bad weather in July.

However, the number of homes coming on to the market had dropped.

"If vendors want to sell their homes quickly, they will have to be realistic in their price expectations," said Peter Bolton King of Rics.

Geographical differences

The ONS index found that prices in England rose by 2.8% in the year to the end of June, but fell by 1% in Scotland and by 11.9% in Northern Ireland. Prices were unchanged in Wales.

Annual house price increases in England were driven by a 6.5% rise in London, the ONS said, alongside rises of 2.3% in the South West and 2.2% in the South East. The only decrease in England was of 1.3% in the North East, the ONS said.

The surveys come after both the Halifax and the Nationwide house price surveys reported falls in values in July.

The Nationwide said that prices had fallen for four of the past five months. The Halifax predicted that there would be little change in prices during the remainder of this year, unless the recession became worse.

The Land Registry survey of house prices, widely regarded as the most comprehensive, showed a wide geographical difference in house price movement in England and Wales.

It said prices rose by 6.3% in London in the year to the end of June, but fell by 1.9% in Yorkshire and the Humber over the same period.