Surveyors in the West Midlands are seeing house prices fall in numbers not seen since the property crash in the early 1990s, claims the Royal Institute of Chartered Surveyors housing market survey published today.
Nearly 80 per cent of chartered surveyors in the region reported a decline in house prices in December, a three point rise on the month before. Just five per cent said they had seen prices go up.
And the buyer market was continuing to lose steam, the survey added, with the number of enquiries dropping for the seventh consecutive month, and at a sharper rate than before.
There was a small rise in the number of properties put on the market, which RICS attributed to the recent extension of Home Improvement Packs (HIPs) to all properties, saying people rushed to put properties on the market before the regulations came in.
The difficulties of the housing market was taking its toll on customers, the survey claimed. Confidence in house prices across the West Midlands fell to its lowest level in the survey's history for a second month, and confidence in sales also deteriorated sharply, reaching its lowest level.
Richard Franklin, RICS West Midlands spokesman, said the figures made grim reading.
He said: "Last year's housing market was marked by an abnormally high number of properties for sale, a number of which were trying to avoid the introduction of Home Information Packs.
"This sudden increase began in the spring but did not wash through the market until December and the expansion of HIPs to all property types.
"Looking forward in 2008, inflationary pressures on essentials, such as fuel and power, may limit the number of aspirational buyers looking to move up the property ladder, but the much anticipated interest rate cuts could encourage more lending.
"With house builders already slowing their start rates for new properties, so as to limit their exposure to the quieter market, the number of completed new build homes will fall below average in 2008.
"In view of the Government's plans for more new homes, this will increase pressure on the Regional Assembly to ensure that more new homes are built as part of the WM Regional Spatial Strategy."
Nationally, the figures reflected the situation in the West Midlands, although not to such an extent as this region.
The house price balance in the UK dropped to its lowest level since November 1992, with 49.1 per cent more surveyors reporting a fall than a rise in house prices, down from 40.6 in November 2007.
The report said that many potential sellers or buyers had been stopped in their tracks by tightening mortgage lending criteria, but it was likely interest rate cuts could help stabilise the market, especially with many first time buyers waiting to get on the property ladder.