Despite record low levels of housing stock, house prices have fallen for the three months to February 2003, the first drop in two years, according to the Royal Institute of Chartered Surveyors.
The drop has been blamed on the increasing number of buyers who are thought to have adopted a ‘wait and see’ approach to the conflict in Iraq rather than the beginning of a long-term downturn as low interest rates and unemployment suggest few are struggling with repayments.
Ian Perry, housing spokesman for the Royal Institute of Chartered Surveyors, said: ‘The faltering housing market has come in response to the growing fears about the situation in Iraq and the direction of the UK economy. This latest survey shows one of the last bastions of economic endurance is simply no longer able to sustain its unprecedented growth in the face of war and the economic uncertainty it has brought about. While the fall in house prices represents a setback for the market, there is no indication at the moment that the downturn will be long lasting.’
The worst price falls were in the South, and especially in London where prices showed the sharpest decline since 1994. However, the price falls are not uniform as prices in the northern regions, the East Midlands and Wales are still rising.
Commenting on the Northern market, Richard Sayer of Northumberland-based estate agent, Rook Matthews Sayer, said: ‘The property market remains strong and there is no sign of fears of a price collapse. Developers are increasing their new build and land acquisition, anticipating demand to increase.’