House prices fall at 1992 level

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by Brian Turner

House prices are falling at a comparable level to the market collapse in the 1990’s, according to a report by Royal Institution of Chartered Surveyors (RICS).

According to a report by RICS, members have seen the worst performance of the property market since 1992.

December marked the fifth month in a row of property deflation, while November figures showed mortgage approvals at their lowest rate for at least three years.

The outlook through 2008 does not look good, with surveyors reporting a continued fall in the number of people looking for property.

Additionally, there has been an increase of over 25% in the amount of unsold inventory over the past three months.

While RICS are keen to stress market conditions are different to 2008, suggestions that the need for housing will prevent a big fall in property prices may be at odds with the impact of the global credit crunch, which makes lenders increasingly hesitate to provide funds.

Already Paragon, the biggest supplier of buy-to-let mortgages, has effectively closed its doors to most new business as it tries to pay back outstanding loans which threaten to otherwise cripple the company.

Overall, the report from RICS continues to underpin continued sentiment that the housing boom is over, and the only question that remains is how much UK property prices will fall, over what period, and by how much.