Large deposits required by lenders appear to be a stumbling block for many would-be buyers.
New instructions, which saw a slight upturn during the early part of the summer, fell back in July, with 7% more surveyors reporting falls rather than rises in new houses coming onto the market. With prices continuing to slip, it appears that many potential vendors are unwilling to accept reduced selling prices, so are reluctant to enter the market.
Elsewhere, demand edged up during July, with new buyer enquiries moving to a net balance of +5% (from 0%). Interest from potential buyers has now been relatively flat since the start of the year.
Across the country, London continues to buck the national trend as the only region to report a positive net balance for house prices, with 30% more surveyors reporting rises rather than falls. The West Midlands and the East of England saw the most negative readings, with net balances of -44 and -40 respectively. Meanwhile, the capital recorded the strongest level of new buyer enquiries, again outperforming the rest of the UK.
Significantly, the average number of sales per surveyor over the past three months dipped to 14.2, the lowest level since June 2009. Alongside this, the average number of properties presently on surveyors’ books increased to 70.2 (from 69.7 in June).
Looking ahead, pessimism still surrounds future house price expectations. Some 13% more surveyors predict prices to decrease rather than increase over the next three months. However, sales expectations are rather more upbeat, with a net balance of 15% more respondents predicting sales to rise over the coming three months.
RICS spokesperson, Ian Perry said: "The UK housing market continued to stall during July; prices edged lower and sales levels remained subdued. While the holiday season appears to have had some impact on the market, the continual problem of inaccessible mortgage finance is still preventing first-time buyers from accessing the market. Unsurprisingly, with prices continuing to fall, many would-be sellers seem unwilling to lower their expectations and are reluctant to place their property on the market."
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