Regional differences in the housing market became increasingly marked during March as activity remained subdued and prices continued to fall, research indicated today.
The number of potential buyers registering with estate agents fell slightly during the month as concern over the state of the economy and worries about rising interest rates added to the problems in the mortgage market, the Royal Institution of Chartered Surveyors said.
A balance of 6% more surveyors reported a fall in buyer numbers in March, with the ongoing shortage of demand continuing to put downward pressure on prices.
Across the UK, 23% more surveyors said house prices fell last month than those who reported a rise, although the majority of those who thought property values declined said they dropped by less than 2%.
However, there were significant regional variations, with a balance of 17% of surveyors in London actually reporting price rises, while the proportion of those reporting price falls was lowest in Scotland, the South East and East Anglia.
At the other end of the spectrum, a balance of 52% of surveyors in the East Midlands and 51% in Yorkshire and Humberside said house prices fell, with surveyors in these regions also reporting steep falls in sales.
Buyer demand increased in Scotland, Wales and the South East, but surveyors in large parts of the Midlands and northern regions of England reported a considerable drop in activity.
John Francis, of Crapper & Haigh in Sheffield, said: “The market remains very difficult at present with lower viewer numbers than this time last year.
“Whilst sales instructions increased over the last month this is largely fuelled by repossessions.”
The number of people putting their home on the market rose slightly during March, but the level of sellers has remained broadly flat since September last year, while the number of new sales agreed was broadly unchanged from the previous month.
Chartered surveyor estate agents said the reluctance of many sellers to lower their prices remained a “stumbling block” for would-be buyers.
Going forward, 24% more surveyors think prices will fall rather than rise, the 10th consecutive month during which further drops have been predicted.
But they are more optimistic about activity in the housing market, with a balance of 5% expecting sales levels to pick up during the coming three months.
RICS spokesman Ian Perry said: “The low level of buyer interest in many parts of the UK continues to impact on the market, resulting in some downward pressure on prices.
“With the prospect of forthcoming interest rate rises and continued shortage of mortgage funding, it seems that overall recovery for the national housing market is still some way off.”