| UK
House Prices Situation at 24 8 07: Stable overall, some
regional rises and falls
UK
House Prices Forecast: Limited to no growth in most
areas, falls in some areas
RICS
Figures Suggest Gradual Slowdown
New
figures from the Royal Institution of Chartered Surveyors
(RICS) suggest that a gradual slowdown in the housing
market is likely.
In
July, RICS members reported small falls in prices in
East Anglia, the East Midlands and Wales.
New
enquiries from potential buyers fell, as did new instructions
to sell property. Unsold stock levels are at their highest
since January and the number of completed sales per
surveyor fell from 24.4 in June to 23.5 in July.
Although
July did see overall growth, this was
substantially below the long-term average, with only
12.6% more chartered surveyors reporting a rise in prices
than a fall. The long-term average is 21.6%.
RICS
spokesman Jeremy Leaf said that "Buyer activity
has pulled back a little over fears that we may have
seen the top of the market". He commented that
uncertainty over interest rates might mean that "first-time-buyers
are continuing to rent until the market trend becomes
clearer."
Will
US Subprime Problems Impact UK House Prices?
There
has been much concern this week over the stock market
instability resulting from the US subprime mortgage
sector's well-publicised problems. Many people fear
that the knock-on effects of these problems could result
in falling UK house prices, especially
if UK mortgage lenders tighten their lending policies
as a result.
Fionnuala
Earley, chief economist at Nationwide believes that:
"It's too early to conclude what the impact of
the current jitters in the market will be, but these
developments will cause some reassessment of risk in
the housing sector.
"In
terms of the implications for the UK housing
market that could mean that wholesale funding
costs will increase and that lenders tighten up their
own criteria…"
Earley
went on to say that these developments could lessen
the risk of any further interest rate increases, which
would help reduce scale of any price falls.
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