House prices expected to fall, say surveyors
15th August 2012

Surveyors are expecting house prices to dip in the coming months, prompting a call for sellers to be realistic about asking prices.

Some 23% more surveyors asked in a survey by the Royal Institution of Chartered Surveyors (Rics) expected prices to fall rather than rise in the next three months.

It found that a similar proportion reported that prices fell in July.

A separate index suggested that prices had been relatively stable.

The Office for National Statistics report found that UK house prices were up 2.3% in the year to the end of June, and up 0.5% from May to June.

Put simply, this survey reflects confidence in the property market rather than what is actually happening to house prices.

About 250 estate agents in the UK, who are members of Rics, are asked if they feel prices in their own areas have been rising or falling in the preceding three months.

Although this appears to be a subjective way of measuring property price changes, generally speaking, the Rics survey is the first to show any change in the market.

Respondents are also quizzed on a host of other related issues, such as whether the number of buyers and sellers are rising or falling.

The government has its own monthly house price index, issued by the Department for Communities and Local Government (DCLG).

It covers the whole of the UK and is based on data supplied by the Council of Mortgage Lenders.

This covers a large sample of completed sales which have gone through with a mortgage, which means that cash sales are not included.

The DCLG says that in the first half of 2010 there were an average of 42,000 loans per month to house buyers, and the sample amounted to about 24,000 sales each month, involving 32 lenders.

Thus the DCLG survey has been covering about 60% of UK sales involving a mortgage.

Unlike the Nationwide and Halifax surveys which are weighted according to transactions, the government’s survey depends much more on the total amount of money spent.

Relying on expenditure in this way will mean that London and the South East, where house prices are highest, will have a greater influence on the government’s index.

It takes figures from when a transaction is completed.

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