UK Housing Sentiment Slides to 30-Year Low
In another sign of the impact of the credit crunch, housing sentiment fell to at least a 30-year low in the UK last month, according to the Royal Institute of Chartered Surveyors.
The RICs housing market survey showed that 78.5% more Chartered Surveyors reported a fall than a rise in house prices in March, an increase from 65.7% in February. This figure has exceeded the historical low of June 1990, when 64.5% more Chartered Surveyors reported a fall in house prices and is now the lowest figure since the survey began in 1978.
The RICS house price balance dropped for the eighth month in succession.
However, a lack of new supply is still preventing significant price falls despite rising stock levels.
Other points from the latest survey:
- Many would-be-buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in the light of current economic uncertainty.
- With the official interest rate cuts not being passed on to the high street there is little expectation that demand will improve in the near term.
- It is clear that price falls are being driven by the inability of many to secure finance rather than an influx of supply into the market.
- The net balance of surveyors reporting new instructions to sell property fell further into negative territory, as the pressure to sell continues to be light given the still-strong employment picture.
- The ratio of completed sales compared to the stock of unsold property on the market fell to 24.8%, down from 26.3%, and is the lowest number since September 1996.
- Both sales expectations and price expectations fell. The net balance of surveyors expecting prices to rise is at the all-time low of -73%.
- Sales expectations moved back into negative territory, with many Surveyors turning pessimistic in the face of continuing financial turmoil.
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