According to results of a survey, a lack of demand from first time home buyers and negative sentiments about the general economic conditions is causing a fall in housing demand.
The Royal Institute of Chartered Surveyors said that the trend of falling prices continued in November. New home enquiries, new deals closed and average sales per surveyor fell further in November than over the previous month. The trend is visible across the UK with overall lower activity in the sector.
However, Surveyors believe that the market generally slows down towards the end of the year and more sellers will put their properties on the market in 2011.
The survey – renowned across the industry, actually reinforces the recent findings of lenders like Halifax and Nationwide.
43% of the surveyors observed that prices have remained stable over the last three months. However, many more disagreed and said prices have actually fallen by a small amount.
First time home buyers struggled to secure a mortgage loan – as evident from the lower number of new buyer enquiries. The negative trend has been recorded for the sixth straight month.
“Despite some better economic data, fears over how future spending cuts will impact on the jobs market are clearly still weighing heavily on potential purchasers’ minds, with many deciding to wait and see until the new year”, observed Ian Perry – spokesman for RICS. “Meanwhile, the lack of mortgage finance continues to deter first time buyers”, he added.
Individual surveyors are so optimistic and fear that the trend may spill over to the next year. Derek Coates of Liverpool said: “The new year looks to be slow with little buyer confidence”.
“We are now entering the winter season and some vendors are putting off the sale of their properties until the spring”, added Stuart Allen of Bishop Auckland.