Outlook for UK house prices drops, transactions expected to increase

Date: Tuesday 12 Jun 2012

The Royal Institution of Chartered Surveyors (RICS) house price balance for the month of May actually rose to -16 in May from -19 in the month before, although London was again the only area where prices actually increased.

The consensus estimate had been looking for a reading of -18. A reading below zero means more surveyors saw price drops than gains last month.

Commenting on the data, RICS spokesman Peter Bolton King said, “ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market (…) in spite of this, a gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across most parts of the country."

The gauge measuring expectations for house prices three months ahead eased to -24 from -18 and the balance for 12 months ahead fell to -8 from 1.

A measure of new buyer inquiries –or demand for homes- dropped to minus 1 from 5, hitting a four month low.

Over the past three months, the price indexes for 11 of 12 regions tracked by RICS showed declines, with Northern Ireland showing the lowest measure, at minus 54.

AB

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