UK House Prices Situation: Rate of growth slowing dramatically.

UK House Prices Forecast: Property values likely to fall.

RICS Reports Increased Negative Sentiment on Prices

The number of chartered surveyors reporting a fall in house prices increased again in January, according to the latest monthly survey from the Royal Institution of Chartered Surveyors (RICS).

The survey found that 54.7% more surveyors reported a fall than a rise in house prices in January - up from 49.1% in December. This figure has been rising steadily for several months and is considered a good leading indicator of the direction house prices are moving in.

The level of unsold stock per surveyor is now 85 - the highest level reached since 1999. This level has increased by 40% since September 2007 - and is up 10% in the last month alone.

Commenting on the survey results, RICS spokesman Jeremy Leaf said that:

"In the near term, the housing market will continue to be shielded from significant price falls while employment conditions are strong. The market need only fear a significant fall in prices if job losses start to multiply."

Leading Bank Forecasts 5% Drop In 2008

Goldman Sachs, one of the world's leading merchant banks and one of very few organisations to predict and profit from the US sub-prime mortgage fiasco, have adjusted their house price forecasts for 2008 and 2009.

Goldman now expect to see UK house prices fall by an average of 5% in 2008, with a further 2% fall in 2009. Previously, the bank had only expected a 3% fall this year, but has adjusted its forecast due to growing evidence of a more significant economic slowdown.

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