House prices fall at fastest rate since 1990s

In its latest survey of members, the Royal Institution of Chartered Surveyors (Rics) has found that the number of estate agents reporting a fall in house prices has risen to its highest level since 1992.

The “balance” (seasonally adjusted difference between the number of members who report a fall and a rise) currently stands at 49.1%, the highest figure since November 1992.

Of the 500 estate agents polled, over 60% reported that UK house prices had fallen over the past three months.

Reductions in property prices are evident across most parts of England and Wales, with the price of homes in the West Midlands falling at their fastest rate since the survey began.

One estate agent summed up the situation as: “Home Information Packs plus Christmas plus interest rates plus credit crunch equals hard times” while others described the market as “depressing”, “fragile” and “extremely quiet”.

The majority of respondents blamed Home Information Packs for some of the difficulties in the market because they deter speculative vendors.

Rics spokesman Ian Perry says: “The Bank of England may have to cut rates further if the market is to remain stable.”

Meanwhile, Capital Economics, the economic forecasting agency, is predicting that UK house prices will fall by 5% in 2008 and 8% in 2009.

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