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March 3, 2008    

Rics expects continued fall in house prices

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by Gill Montia

The Royal Institution of Chartered Surveyors (Rics) has reported that it expects the fall in house prices to continue “for a while to come”.

The statement highlighted the plight of potential first-time buyers, with many mortgage lenders “scaling back loan-to-value ratios” and offering preferential interest rates to existing homeowners and those with huge cash deposits.

However, a reduction in the number of first-time buyers means that house prices will not be underpinned by demand from those getting a foot on the property ladder.

The Institution also noted that although the number of mortgage approvals rose slightly in January, to 74,000, the figure is 40% down on January 2007 and close to historically low levels.

The comments come alongside the latest house price survey from Nationwide, showing that house prices dropped for the fourth consecutive month in February.

Last month, the average house price fell by 0.5% and now stands at £179,385.

The average annual rate of house price inflation declined to 2.7%, its lowest level since November 2007.

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