Page last updated at 09:53 GMT, Tuesday, 15 April 2008 10:53 UK

Housing gloom 'worst in 30 years'

Sale signs
Major lenders are expecting house prices to fall in 2008

Confidence in the UK housing market fell in March to its lowest point in 30 years, according to a closely watched survey of property surveyors.

The Royal Institution of Chartered Surveyors' (Rics) said that 78.5% more surveyors reported a fall than a rise in house prices in March.

This was the gloomiest reading since Rics began the survey in 1978.

The government's own house price figures confirmed a fall in prices in February by 1.6%.

The results come after leading mortgage lenders have offered similarly downbeat views on property prices.

Rics said the next six months would be crucial for homeowners and would-be buyers in the UK.

Historical low

The Rics house price balance dropped for the eighth consecutive month. It exceeded the previously lowest reading in June 1990.

Jeremy Leaf, Rics spokesman, said the gloom was the result of the credit crunch and its effect in stopping mortgage providers lending to each other.

Brendan Denver spent thousands on his home but cannot find a buyer

"Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight," he said.

But he added that a significant crash in prices remained unlikely and buyers with access to large deposits had the chance to get their hands on property they could not previously aspire to.

Following the trend

The survey follows March reports from the UK's two biggest mortgage lenders which reported month-on-month falls in house prices and predictions of a fall throughout 2008.

Last week, the Halifax reported a 2.5% fall in prices in March, the biggest monthly decline since September 1992 and the slowest annual growth for 12 years.

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

Prime Minister Gordon Brown and Chancellor Alistair Darling are meeting banks and mortgage lenders to discuss liquidity - widely regarded as the key factor affecting mortgage availability.

The problems in the financial markets has meant lenders are keen only to attract low-risk customers who can offer a significant deposit.

Some 49% more surveyors reported a fall than a rise in new buyer enquiries, against 39% in January.

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

Falls in price

The falls in prices are particularly marked for flats and maisonettes and in certain parts of the country.

We need to tread very, very carefully before making long-term judgements on the market at this current, unsettled, time
Peter Bolton King, National Association of Estate Agents

The sharpest falls were in the East Midlands and East Anglia, while slower falls were recorded in north-west England, Wales and London.

Scotland continued to buck the trend, with house prices reported to be rising slightly.

The stock of unsold property on surveyors' books declined by 1.3% compared with February, but up 50% over the year.

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA) warned against doom-mongering, saying the housing market was still underpinned by strong economic factors.

"The market is battling with the credit crunch, which has undoubtedly had an effect on confidence," he said.

"However, the key factors that underpin the housing market still exist - low unemployment, historically low interest rates and a pent-up demand for houses.

HAVE YOUR SAY
Brown has defied all economic principles and destroyed what was a healthy economy riding on the back of a made up housing boom and cheap credit
Steven, London

"We can see from the figures that it is not all doom and gloom out there and we need to tread very, very carefully before making long-term judgements on the market at this current, unsettled, time."

Government figures

Meanwhile, the government's own house price survey, also published on Tuesday, confirmed a fall in house prices in February, down 1.6% on the previous month.

The Department for Communities and Local Government (DCLG) survey runs a month behind other house price indexes as it is based on sale completions, rather than mortgage approvals.

It put the average house price in the UK in February at 217,737.

In the three months to the end of February, property prices fell by 0.5%, against a fall of 0.2% in the previous quarter.

Annual house price inflation in the UK was down from 8% in January to 6.7% in February, with the slowdown particularly marked in London (down from 13.8% to 9.5%).

Again, Scotland showed the highest year-on-year rise in prices, at 9.7%.




RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific