12 Oct UK house price gap continues to widen
House prices declined in all areas of the UK except London over the last three months, according to research released today. The Royal Institution of Chartered Surveyors’ monthly housing market survey has highlighted a widening gap with the rest of the UK, as London property continues to soar ahead compared to other areas.
Regions such as the East and West Midlands, Yorkshire and Humberside and East Anglia, all recorded property prices falling significantly.
A balance of 25 per cent of surveyors in London reported rising prices, while surveyors in East Midlands recorded a balance of -63 per cent, indicated falling prices across the region.
West Midlands had a balance of -58 per cent, while Yorkshire and Humberside and East Anglia both recorded a balance of -39 per cent – with all of these regions suffering massive falls in the last three months.
The RICS research indicated that property price expectations for the future remain negative, with 23 per cent of surveyors expecting a decline in prices over the next three months.
The number of homeowners putting their property up for sale also fell last month according to the research, as fears of a double-dip recession continue to linger and knock confidence.
New instructions, which reflect supply levels, dropped in September as an increasing number of surveyors reported a fall rather than rise in the supply of property.
New instructions fell from a balance of -1 per cent to -5 per cent last month, while newly agreed sales fell from 2 per cent to -4 per cent, RICS said.
The decline in new properties being put for sale comes despite mortgage providers slashing rates in a bid to draw in new customers and boosted by the Bank of England’s record low base rate.
Average mortgage repayments stand at £574.15, making up 26 per cent of earnings after tax, according to research by the Halifax, compared with 48 per cent of take home pay at £887.62 in mid-2007.
Michael Newey, RICS spokesman said: ‘Falling supply of fresh stock is indicative of general fears overhanging the economy, with many potential sellers preferring to stay put for now.’
Elsewhere, Mr Newey said the Bank of England’s decision to inject £75billion of cash into the economy through its quantitative easing programme will help to keep mortgage rates down and limit the risk of a pick-up in repossessions.
But despite the RICS data showing house prices falling in all regions except London, separate research by the Department of Communities and Local Government (DCLG) has shown that UK house prices were actually up 0.6 per cent in August.
This, according to the research, is the biggest rise since March 2011.
However, despite the increases indicated by the data, the DCLG said that house prices were still 1.3 per cent lower than a year earlier.