Residential property prices in the UK fell at their fastest pace for six months in April as a temporary boost from a the stamp duty holiday faded, according to the latest report from the Royal Institution of Chartered Surveyors (RICS).
London was the only part of the country where house prices increased but at the slowest rate since the middle of 2011 and for the first time since September, home sales declined. The West Midlands and Wales saw the most significant declines with net balance readings of -43 and -39 percent respectively.
House prices had earlier been supported by an exemption for first time buyers from a stamp duty on homes worth less than £250,000 which expired in March, as well as by unusually warm weather which boosted viewings.
‘With the recent surge in activity brought on by the stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall,’ said RICS housing spokesman Peter Bolton King.
Surveyors also turned more pessimistic about home prices across Britain in the future, with a big fall expected over the next three months and broadly flat prices seen in a year’s time.
‘Renewed concerns over the economy and talk of a double dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence,’ added Bolton King.
Across the country, 19% more chartered surveyors reported falls rather than rises in house prices. Alongside this, expectations for future prices reached their lowest level this year with a net balance of 17% more respondents predicting further drops.
Demand from potential buyers was relatively flat during April as 5% more surveyors reported increases rather than decreases in new buyer enquiries.
Meanwhile, new instructions, a good indicator of supply coming onto the housing market, was once again stable as 1% more respondents reported falls rather than rises in new homes coming up for sale. While flat, the level of supply has not seen any significant drops since July last year.
Following the upturn in activity seen towards the expiry of March’s stamp duty holiday, in April transaction levels entered negative territory for the first time since September, as 6% more respondents across the UK reported decreases rather than increases in transaction levels.
Looking ahead, while surveyors’ predictions for future prices saw a notable dip, expectations for transaction levels once again remained positive with a net balance of +15% more respondents expecting sales to rise over the coming three months.