New Rics survey shows house prices at six-month low

House prices in the West Midlands dipped slightly in January as sales hit a six-month low, the latest survey by the chartered surveyors' body, RICS, showed yesterday.

But a rebound is on the cards as expectations of a cut in interest rates attract buyers back into the market, the organisation said.

The Royal Institution of Chartered Surveyors said its January housing market survey showed that buyer enquiries levelled out for the second consecutive month.

More than 60 per cent of its members in the West Midlands reported prices stayed the same in January compared with 80 per cent the previous month.

The proportion reporting a fall in prices rose by 17 points to 28 per cent while those reporting a price rise increased to 11 per cent from two per cent.

Confidence in market prospects is holding up well, with surveyors still expecting activity to rise further in the months to come.

Despite the slowdown in enquiries last month, a "swell of pent up demand" is driving the West Midland housing market in February, Harvey Williams, RICS' spokesman in the region, said.

"With improving economic conditions, we are seeing enquiry levels up by 11 percentage points on this time last year.

"However to really get the market moving we need to see an increase in the number of sales to first time buyers, with current sales levels to this group are running at less than 25 per cent of all those negotiated.

"As the life blood needed to kick the market into action we hope to see this number increase as we head towards spring."

Nationally, house prices rose for the third consecutive month in January with nine per cent more char-tered surveyor estate agents confirming a rise in prices than a fall for the three months to January, compared with eight per cent in December.

Buyer enquiries increased for the eighth consecutive month, the longest continual increase since the survey began.

Completed sales rose by 15 per cent compared with time last year. This heightened activity is driving price rises, though there are no signs that the market is returning to the boom conditions seen between 1997 and 2002.

Consumer confidence improved but weaknesses in the labour market remained a concern as its strengths have been an important factor in lifting housing market activity, RICS said.