House prices fall in September
A large rise in the number of homeowners putting properties on the market saw house prices fall for the third consecutive month in September, a study has revealed.
The Royal Institution of Chartered Surveyors's (RICS) monthly figures showed that the balance of surveyors reporting a rise in new instructions nearly doubled last month to 22% - giving the limited number of buyers seeking a property more choice and putting downward pressure on prices.
The group said many homeowners are testing the water ahead of the Government's spending cut announcement and trying to get an idea of how much their home might be worth or how long it might take to sell. It said others could be trying to sell their property before a further deterioration in the economy - which may or may not materialise - but which would likely see house prices give back some of their recent gains.
Many homeowners may have genuine reasons for wanting to sell their home, but the more people put their properties on the market speculatively, or even due to fears over a double-dip recession, the bigger impact this is likely to have on dragging prices down further.
Valuing a house for home insurance purposes does not need an accurate measure of market value as it is based on rebuild costs and not the total value of the property.
But the rise in sellers was not matched by an increase in buyers as people continued to sit on their hands to see how the market develops, while mortgage finance also remained tight.
Around 2% more surveyors said they had seen a fall in new buyer inquiries than those who saw a rise, although this was down from a balance of 17% of surveyors who reported a fall in buyers in August.
Unsurprisingly, given the rise in properties being put up for sale and the ongoing shortage of buyers, house prices continued to fall, with 36% more surveyors reporting a drop than those who saw a rise, up from 32% more the previous month.
However, around half of respondents said they thought house prices had been broadly stable.
Surveyors expect further price falls going forward, with a balance of 41% expecting the cost of property to continue declining, the highest level since March last year.
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