Residential property prices in the UK fell strongly last month apart from in Scotland where the market appears to be showing signs of recovering faster than the rest of the country.
The September UK Housing Market survey from the Royal Institute of Chartered Surveyors published today (Tuesday October 12) says the outlook for property market remains positive in Scotland, but England, Wales and Northern Ireland are lagging behind and suffered the sharpest fall last month since May 2009.
An increase in supply indicates there is a rush to sell before public spending cuts bite, RICS said. Some 44% of its members saw prices fall, only 6% reported prices rising and 59% said prices were stable.
In Scotland though, 10% more Scottish chartered surveyors reported a rise rather than a fall in house prices in September, compared with 3% in August, the 15th consecutive month of positive price net balance readings in the market.
‘The market is showing signs of a recovery after a sluggish summer period. Traditional bungalows in suburban locations remain in fair demand,’ said Craig Henderson of Graham & Sibbald chartered surveyors in Glasgow.
Graeme Hartley, director, RICS Scotland, said that demand for property in Scotland rose sharply in the past month and with new instructions rising at a slower rate, surveyors have reported a rise in price expectations.
On the other hand in the rest of the country a fresh influx of property to the market combined with a lack of buyers remains the key problem affecting the sector, according to RICS spokesperson Ian Perry.
‘The increase appears to come as homeowners test the market ahead of further public spending cuts, or try to sell before a possible deterioration in the economy,’ he added.
Regionally, the North saw the biggest leap in new instructions, while London, the South West and Yorkshire and The Humber also reported large increases in seller activity.
Meanwhile, demand for property remains subdued, as buyers continue to struggle to find mortgage finance, or wait to see what will happen to the market over the coming months. The net balance for new buyer enquiries remained negative at -2, however, this is up from -17 the month before.
‘First time buyers are in particularly short supply as the high deposits required by lenders prevent them from taking their first steps on the property ladder,’ said Perry.
Increasing supply means that prices are likely to keep falling. The survey showed surveyors were braced for further losses. The price expectations balance slipped to -41 from -38, a fourth consecutive month of decline.
‘Without sufficient demand property prices continue to slip back. However, many areas are reporting a correction rather than dramatic falls in prices and vendors who are prepared to be realistic with pricing are still able to achieve a sale. It’s very much a buyers market at the moment,’ added Perry.