Surveyor gloom close to a record

Enquiries from new buyers are still falling fast

The number of UK surveyors reporting house price falls in February was close to the historic level of June 1990.

Cautious homeowners have caused housing stockpiles to rise to levels not seen for a decade, the Royal Institution of Chartered Surveyors (Rics) said.

Some 64.1% more surveyors reported a fall than a rise in house prices in February - up from 54.7% in January.

But the survey said Scotland was bucking the trend, with 25% more reporting price rises - up 18%.

Highs and lows

The survey showed the UK trend had continued for the seventh consecutive month and was close to the June 1990 low, when 64.5% more surveyors reported house price falls than increases.

But the picture in Scotland mirrored economic data coming out of the country, showing a rise in the balance of surveyors reporting price rises from 7% to 25%.

Across England and Wales, enquiries from would-be new buyers are still dropping fast and fell for the 15th month in a row, suggesting a continued slowdown in the market is likely in the coming months.

"Many would-be-buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in light of current economic uncertainty," said Rics.

Common theme

House price surveys have all suggested a slowing market, but differ in their interpretation of the pace of decline.

According to a monthly survey from the Halifax, prices across the UK fell by 0.3% in February, taking the annual rate of inflation down from 4.5% to 4.2%.

But it did not report such a speedy decline as its rival, the Nationwide, which registered its fourth monthly price fall in a row and said prices in the three months to February had been 1% lower than in the previous three.

Rics said that would-be buyers were struggling to raise the necessary finance or sitting tight during the current economic uncertainty. Some 37% more surveyors said new buyers' enquiries were down than those reporting increases.

Effect on stock

Employment levels remain strong in the UK, which means homeowners are under little pressure to sell.

Yet a lack of demand meant the stock of unsold property on surveyors' books was up 8.5% in February, the fifth monthly rise in excess of 8%.

"Confidence in the market is clearly having an effect on prices," said Rics spokesman Ian Perry.

"While there is very little new supply coming onto the market, it is unlikely that there will be significant price drops in the short term but the build up of unsold stocks will encourage buyers to negotiate lower asking prices."