Tentative signs of an improvement in the battered housing market have emerged in the West Midlands, the region’s chartered surveyors have reported.
There was an increase in the number transactions in October despite the stifling lack of loans, according to the Royal Institution of Chartered Surveyors (RICS) yesterday .
The average number of house deals per estate agency measured on a three-month basis rose to 15 in October from 13 the previous month.
But that was offset by a rise in the number of surveyors reporting falling house prices – 81 per cent of respondents versus 77 per cent last month. Nationally, the proportion reporting price falls fell to 82 per cent from 84.5 per cent, RICS said.
Nor was a rise in confidence levels reflected in the West Midlands. The number of agents expecting sales to pick up fell, by 27 per cent, while nationally 20 per cent more were optimistic that an upturn was on the way.
RICS’ West Midland spokesman Ben Hudson, a director of Greenhill & Brownfield, said: “Sadly it appears that the recent historic interest rate cut is not being fully passed on by the majority of high street banks.
“Potential would-be buyers will therefore continue to sit on their hands until the credit market frees up.”
The RICS report coincided with the publication of Government figures showing the annual rate at which house prices are falling continued to accelerate during September to hit a new record of 5.1 per cent.
The fall wiped nearly £12,000 off the price of the average home, which now stands at £208,583, the lowest since March 2007.
The rate at which homes are losing their value, however, slowed to just 0.1 per cent in September versus 2.7 per cent in August House prices are now falling in all regions of the country on an annual basis, with Northern Ireland seeing the biggest drop (15.8 per cent), followed by the East Midlands and West Midlands (seven per cent and 6.8 per cent respectively), according to the Communities and Local Government department (CLG).
Scotland has seen the lowest level of house price falls, with properties losing just 0.8 per cent of their value during the past year.
The annual rate at which house prices are dropping eased in three of the UK’s regions during the month, although that rate accelerated in the other nine. First-time buyers are benefiting mor.e from the price falls than former owner-occupiers, with the average cost of a first home falling by 7.8 per cent during the year, compared with a drop of four per cent for a home-mover.
Some of this difference is likely to be due to the problems faced by first-time buyers in raising the mortgage finance.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “The latest data and survey evidence does little to alleviate the belief that prices are set to fall markedly over the coming months. Indeed, even though mortgage lenders are largely passing on last week’s 150 basis point interest rate cut by the Bank of England, the fundamentals for the housing market remain largely unfavourable.”
Seema Shah, property economist at Capital Economics, said: “While sharp base rate cuts may stimulate new buyer enquiries, with lending criteria tight, mortgage rates still high, and unemployment rising, we doubt this will materialise into stronger housing market activity.
“As such, the rate of house price falls is unlikely to slow in the foreseeable future, and may yet accelerate.”