UK house prices fall at fastest rate for 9 yrs in Sept - RICS -
Monday, October 18, 2004 4:21:54 PM
afxpress.com
(Updating with more details throughout)
LONDON (AFX) - House prices fell at their fastest rate for nine years in September as the Bank of England's series of interest rate hikes took their toll on the housing market, a survey showed
The latest house price survey by the Royal Institution of Chartered Surveyors showed that in the three months to September, 30 pct more surveyors reported a fall in house prices than a rise, the weakest level since June 1995
In August, the balance was -12, the first negative reading in over a year
Details of the survey were leaked ahead of the scheduled release at midnight tonight
But RICS believes it is unlikely that the housing market will experience a deep or prolonged downturn in prices as long as the economy remains stable and people are confident about job security
The survey found that buyer enquiries fell for the fifth consecutive month. Activity was more depressed in Northern England and the Midlands but a little less pronounced in Southern England, including London. Looking ahead, surveyors predict a period of stagnation with sales activity levelling out. RICS national housing spokesperson Ian Perry said the BoE is getting what it wanted. ‘The medicine is working. The slowdown is desirable from the point of view of market sustainability and may mean that further rate rises are unnecessary for the time being. While consumers keep confidence in job security and the economy we don't expect large price falls," he added. The data is likely to cement expectations that the BoE will not raise rates any further at least until next year, with a strong possibility that rates have already peaked
The BoE has hiked interest rates five times since last November, taking the current rate to 4.75 pct
"The data runs a coach and horses through other survey data for September from the building societies (Nationwide and Halifax) which peculiarly suggested price rises during the month," said CALYON analyst Daragh Maher. The report will make it difficult for any hawkish concerns expressed in the minutes from the last meeting of the BoE's Monetary Policy Committee to "have a lasting impact" on either the pound or short sterling, he noted
The MPC minutes are due for release on Wednesday |
