Caution about the overall outlook for the economy and the prospect of future interest rate hikes are compounding the difficulties over access to mortgage finance for many first-time buyers.
Despite this negative reading nationally, strong regional variations were evident. Large parts of the Midlands and the North of England saw buyer interest drop considerably, while surveyors in areas such as Scotland, Wales and the South East reported a steady increase.
Meanwhile, new instructions, which indicate supply levels to the market, remained steady; with 4% cent more surveyors reporting instructions rose rather than fell during March.
Newly-agreed sales registered a flat reading nationally, with a net balance of +1.
However, the regional picture again showed considerable variation. Transaction levels were most positive in the South West and Wales, while the East Midlands and Yorkshire and Humberside experienced particularly negative readings. Surveyors report that the reluctance of vendors to further lower their price remains a stumbling block to many would-be buyers.
Nationally, 23% more chartered surveyors reported a fall rather than a rise in property prices (from 26% more in February). However, the majority of respondents recording price falls did so in the 0-2% price range.
London was the only area of the country to report a rise in prices, demonstrating that the Capital is still operating under different market conditions to the rest of the country.
Alongside this, price expectations for the next three months remained downbeat, with 24% more surveyors predicting prices will fall rather than rise. While representing a slight improvement from February’s net balance of 28% more, this reading has now remained negative for ten consecutive months.
Looking ahead, 5% more surveyors expected sales to increase rather than decrease, suggesting that there is some hope that activity may edge upwards over the coming three months.
RICS housing spokesperson, Ian Perry said: "The rather negative outlook for property prices across the UK seems to better reflect the general economy than the micro climate of London. The low level of buyer interest in many parts of the UK continues to impact on the market, resulting in some downward pressure on prices.
"With the prospect of forthcoming interest rate rises and continued shortage of mortgage funding, it seems that overall recovery for the national housing market is still some way off."
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