UK House Prices Situation at 21 12 2007: Weakening

UK House Prices Forecast: Widely forecast to fall next year

RICS Figures Show Falling Prices and Falling Confidence

RICS (Royal Institution of Chartered Surveyors) is the industry body for property surveyors. Its monthly survey of its members is considered an important and reliable indicator of the direction the property market is moving in.

The latest survey results, for November, show only negative sentiment. 40.4% more of RICS' members reported falling prices than rising prices. This negative figure was only 23.4% in October - indicating a definite hardening of negative sentiment amongst property professionals.

RICS also reported that estate agents' unsold stock rose by another 8.7% in November - following a 9.7% rise in October. With more and more unsold properties on their books, it's no surprise that estate agents are reporting that buyers are making aggressively low offers on properties they are interested in - and that these offers are becoming increasingly successful.

HIPs Now Apply To Everyone

The much-debated HIPs (Home Information Pack) scheme was expanded on 14th December to apply to all residential properties being placed on the market. When first introduced, properties needed a certain number of bedrooms to qualify, but these restrictions have now ended.

There are still a number of exemptions from the HIPs scheme - it's worth taking a look at the government's HIPs website (www.homeinformationpack.gov.uk) if you think you might not need one.

City Believes House Prices Are Going Down

City analysts and other economists enjoy a fine tradition of publishing conflicting forecasts of economic trends - but increasingly they are all in agreement on the likely direction of the housing market.

Down

Invesco Perpetual fund manager Neil Woodford offered this opinion:

"There is every possibility that the housing market... will deliver a shock to consumer confidence and spending. In this situation, it is likely we will flirt with recession."

He's not alone, either. Organisations as large as HSBC, Morgan Stanley bank and the International Monetary Fund have all recently published comments stating their belief in the likelihood of a housing downturn in the UK.

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