Housing market confidence hits 30 year low

The Royal Institution of Chartered Surveyors (Rics) has published the findings of its March survey of members, showing that confidence in the UK housing market has fallen to its lowest point since the survey began in 1978.

The proportion of surveyors reporting a fall in house prices, rather than a rise, increased for the eighth consecutive month, to 78.5%.

The figure exceeds the survey’s previous record reading for a fall, which was in June 1990.

The research also shows that 49% more surveyors reported a fall than a rise in new buyer enquiries, up from 39% in January.

The stock of unsold property on surveyors’ books fell by 1.3% in March, compared with February, although unsold stock is still 50% up on March 2007.

Little relief is in sight as mortgage lenders struggle to raise funds and the Council of Mortgage Lenders warns that the value of home loans offered could fall by 50% in 2008, unless the Bank of England offers additional support.

However, Rics spokesman Jeremy Leaf is optimistic that an outright house price crash will be avoided.

He believes that the market will be supported by buyers with large deposits who will be able to acquire property that would previously have been beyond their price range.

Lenders are currently keen to attract low-risk borrowers with access to significant deposits.

The findings of the survey are supported by the Halifax house price index, which reported a 2.5% fall in prices, in March.

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