House prices on ‘softening’ trend

PROPERTY professionals predict that house prices will continue fall until the spring when a lack of new instructions will begin to even things out.

The Royal Institution of Chartered Surveyors (RICS) in the the east of England says that a sharp increase in demand for rented property points to further increases in rent levels over the course of 2011.

Commenting on the most recent Halifax House Price Index, David Potter, RICS East operations director said: “Data released from the Halifax suggests the property market ended 2010 on a weak note with house prices slipping by 1.3 per cent in December.

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“Although this contrasts with a modest monthly rise signalled in the Nationwide Building Society series, the underlying picture, according to both lenders, is a more consistent story; both indices indicate that prices dropped by around one per cent in the fourth quarter of last year.

“RICS expects this softer trend in prices to persist in the early months of 2011, with demand for property continuing to be adversely affected by the combination of uncertainty over the economy and challenging conditions for first-time buyers looking to access mortgage finance.

“However, by the spring our suspicion is that the drop in supply (new instructions) now evident in the RICS data will begin to provide a floor for the market.

“Meanwhile, the sharp increase in demand for rental property points to further rises in rents over the course of 2011.”