Mini Property Boom Is Over in England

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By Myra Butterworth

The Royal Institution of Chartered Surveyors said “increased uncertainty” about the economic outlook was making home buyers more cautious.

This reduced demand is combined with an increase in the supply of properties following the abolition of Home Information Packs. It is a reversal of the fortunes of the housing market which saw prices rise sharply in many areas during the past year due to a lack of suitable properties.

Jeremy Dell, a RICS member based in Worcestershire, said: “For me, the market is the worst it’s ever been. The Government’s determination to balance the books has undermined confidence.”

And David Sherwood, a RICS member based in Essex, said: “There are double dip worries. And there is a lack of funding but overall a lack of confidence is having a negative impact on the residential market.”

RICS said eight per cent more estate agents reported a fall rather than a rise in house prices in July, the lowest reading in more than a year. It is in sharp contrast to last month when 8 per cent more surveyors reporting rising rather than falling prices.

At the same time the number of new sellers increased with 33 per cent more estate agents seeing a rise rather than a fall in properties to their books, up 28 per cent from June and the highest level since before the beginning of the credit crisis in May 2007.

Ian Perry, a spokesman for RICS said: “The fall in the RICS house price is a reflection of both the increase in supply following the scrapping of HIPS and the more cautious stance from buyers.

“Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year.”

Melanie Bien, director of mortgage brokers Private Finance, said: "Concerns about the economy and future job prospects are causing an increasing number of buyers to put off any house purchase until there is more certainty. Most people are reluctant to commit to something as expensive as a property purchase when you they are worried about losing their jobs or interest rates rising."

A separate report warned the housing market is the toughest for first time buyers in decades.

They will borrow more money and raise a larger deposit than at any other point in the past quarter of a century, according to Nationwide.

Britain’s largest building society said first-time buyers paid £26,422 for a home 25 years ago and put down a deposit of £1,321. It compares with a deposit of £35,614 towards the £142,457 cost of a home today.