House prices stagnate

Property prices in the UK have fallen by an average of more than 2,000 in the last two months, according to a new survey from online company Rightmove

17:13 15 August 2005

House prices fell at their slowest pace in five months in July, according to a new survey.

The Royal Institution of Chartered Surveyors (RICS) found 36 per cent of estate agents reported falling prices, an improvement on the 41 per cent figure in June.

In July, 43 per cent of estate agents reported falling prices; over half (51 per cent) noted stagnating prices and six per cent said prices were rising.

RICS said it appeared the market had responded to the Bank of England's fillip this month of an interest rate cut of 25 basis points to 4.5 per cent from 4.75 per cent.

But RICS said the housing market remained "sluggish" in July.

The survey found the number of new sellers on the market increased at the slowest rate in more than a year while the average number of unsold homes on surveyors' books increased by one from 78 per surveyor.

Looking at the obverse case, RICS found the number of people registering as potential home-buyers rose for the second month in a row in July, suggesting buyers were more willing to cough up the cash.

Jeremy Leaf, RICS housing spokesman, said signs of recovery were evident in the market.

"Would-be buyers have become more confident as a result of the interest rate outlook, while the economy continues to deliver steady growth despite the past year's slowdown," he said.

But he added the caveat that there was little prospect of a renewed house price boom "any time soon".

The survey follows similar findings from online property agency Rightmove, which claimed that property prices have fallen by an average of more than 2,000 in the last two months.