The Royal Institute of Chartered Surveyors (RICS) is predicting
that more would-be buyers could turn to the rental market
due to a slowdown in the housing market plus a combination
of factors.
Last month 14.6 per cent more chartered surveyors reported
a fall rather than a rise in property prices, compared
to a figure of just 3.3 per cent in August.
RICS believes anyone looking to get cash for property
may want to do so sooner rather than later in case prices
fall
further.
There was also a downturn in the number of new buyers
entering the market and the institute says this is
due to the combination
of rising interest rates, the introduction of HIPSs
and volatility in the financial markets resulting in
tightening
of lending criteria.
Gross mortgage lending fell by nearly 12 percent in
September compared with August, to an estimated £30 billion
according to new data from the Council of Mortgage Lenders
(CML).
Although lending was up 2.5 percent on the £29.2
billion figure for September 2006, the annual increase
is the lowest percentage increase in two years. The figures
are not seasonally adjusted.
While lending typically falls between August and
September, a 12 percent decline is larger than
the norm of around
five percent. This easing in the market is another
sign of the expected consumer response to the
five interest
rate rises experienced since August 2006.
CML director General Michael Coogan said: “We have
been expecting a slowdown in monthly lending levels in
line with interest rate rises. In the coming months, we
expect to see monthly lending levels dip below their 2006
levels for the first time this year as rate effects are
exacerbated by the recent liquidity problems in the mortgage
market.”
Commenting on the mortgage lending data, Simon
Rubinsohn, RICS chief economist, said: "The gradual slowdown
in housing market activity continues unabated.
“
Mortgage lending remains higher than the same period last
year, yet recent months have seen a marked slowdown in
lending volumes in response to the previous interest rate
hikes, stretched affordability and the impact of the Northern
Rock episode.
“
RICS expects activity to slow further into the New Year.
2008 will see a subdued market and little or no change
in house prices."
