Lack of finance contributes to house price drop

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Lack of finance contributes to house price drop

Wed 16th Apr 2008

A spokesperson for the Royal Institute of Chartered Surveyors (Rics) has cited the current lack of available finance, which has caused a drop in buyer demand, as the main reason why house prices are slowing.

Jeremy Leaf stated that "sentiment is at a very low ebb" and predicted it would remain that way "while the economy suffers from this unique liquidity blight".

The organisation's house price balance dropped for the eighth consecutive month in March, to a record low.

Some 78.5 per cent more surveyors reported a fall than a rise in prices, an increase of 12.8 per cent from February.

Rics also found that demand is continuing to weaken, with 49 per cent more surveyors reporting a fall than a rise in new buyer enquiries, up from 39 per cent at the start of the year.

Despite the depressed figures, Mr Leaf predicted that "until new supply increases dramatically a significant crash remains unlikely".

The Halifax House Price Index for March suggested that prices fell by 2.5 per cent last month, taking the average price of a UK home to £191,556.

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