Rics gives prediction for house prices in 2011

| December 22, 2010
Rics gives prediction for house prices in 2011

The Royal Institution of Chartered Surveyors (Rics) has today indicated house prices could fall by around 2% in the next 12 months.

However, the Institution highlights that the fall could be much more severe if the Government’s austerity measures hamper the economic recovery.

Many reports have pointed to a cooling housing market with continuous falls in mortgage approvals.

In addition, yesterday HM Revenue & Customs (HMRC) revealed a slump in the number of homes sold in November in the UK.

According to HMRC, 77,000 homes worth at least £40,000 or more were sold in the month – down from the 80,000 sold in October and 6,000 less than in November last year.

Experts have suggested that the housing market will remain subdued in 2011, due to uncertainty surrounding the economy and the ongoing mortgage rationing by lenders.

Over recent times, demand for housing has been weak as many buyers have adopted a “wait and see” approach as uncertainty continues to surround the economy and the spending cuts make prospective buyers cautious.

House prices have also come under pressure as new instructions continue to outstrip buyer demand.

House prices have been losing value since late summer after a recovery in the latter half of 2009.

The Rics comments: “Our suspicion is that prices in the final quarter of 2011 will in all probability not be very different from where they currently stand … prices may drop a negligible 2 percent.”

However, spending cuts introduced by the Government could threaten growth and unemployment is expected to rise, which could force some homeowners to sell up, say the Rics.

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