There was a large rise in the number of homeowners placing their property on the market in September as concerns over the economic outlook grew.
In its latest Housing Survey, RICS is reporting that 22 percent of its chartered surveyors reported a rise in the number of new instructions, up from 12 per cent in August.
The increase appears to come as homeowners try and sell their homes ahead of further public spending cuts, or try to exit the market before a possible deterioration in the economy.
This influx of sellers comes at a time when the demand from house buyers is subdued. Mortgage finance is still difficult to come by and potential buyers appear to be waiting to see want happens to the economy over the next few months.
This imbalance in the market is driving house prices downwards – 36 per cent more surveyors reported a fall rather than rise in house prices in September, down slightly from a net balance of -32 the month before.
This supports the findings from the Halifax which reported a 3.6% fall in house values in September.
There do appear to be glimmers of optimism about the future of house prices, however, particularly if buyers are realistic with their pricing, as Ian Perry, RICS spokesperson says:
“The fresh influx of property to the market combined with a lack of buyers remains the key problem affecting the sector. First time buyers are in particularly short supply as the high deposits required by lenders prevent them from taking their first steps on the property ladder.
“Without sufficient demand property prices continue to slip back. However, many areas are reporting a correction rather than dramatic falls in prices and vendors who are prepared to be realistic with pricing are still able to achieve a sale. It’s very much a buyers market at the moment.”