House prices fall for fourth consecutive month

Latest figures from the Royal Institution of Chartered Surveyors (Rics) show that UK house prices have fallen for the fourth month in a row.

In its November survey, 41% of Rics members reported a drop in prices over the previous three months.

This compares with 23% of members who reported that prices were still rising.

Prices fell across England, Wales and Northern Ireland, but continued to rise in Scotland.

An Rics spokesman commented “It is clear that the housing market continues to feel the strain of depressed market conditions … the recent credit crunch continues to hit confidence in the market; however, while underlying economic fundamentals remain sound and the labour market remains strong, large falls in prices remain unlikely.”

Enquiries from new buyers also fell during November, as did the number of newly agreed sales, which dropped at their fastest rate since the Rics survey began in 1999.

While the Bank of England’s recent cut in the base rate, to 5.5%, could go some way to ease affordability issues the impact is likely to be lost because over one million homeowners will be coming to the end of their fixed-rate mortgages in the coming year.

This group of homeowners will be forced to remortgage at higher rates, compounding the rise in mortgage interest costs, which now account for more of households’ incomes than at any time since the early 1990s.

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