House prices will remain subdued well into 2011, continuing a trend dating back to the Spring of 2010, according to the Royal Institution for Chartered Surveyors.
In its monthly UK Housing Market survey, RICS reported the seventh consecutive month of falling new buyer enquiries, which signal demand for property. Lending constraints to first-time buyers, was the principal reason for the lack of enthusiasm, it said.
December’s unseasonably cold weather also hurt sales in December with 15 per cent more estate agents reporting fewer sales in the month, than those who reported more sales.
More positively, surveyors’ expectations for sales over the coming months edged up, with eight per cent more expecting sales to increase rather than decrease, up from six per cent in November.
However, pessimism still surrounds house prices, with 29 per cent more surveyors reporting expected price falls rather than price rises.
The historical picture is also fairly gloomy with 39 per cent more surveyors reporting prices fell rather than rose in December - although this is an improvement from -44 per cent during the previous month.
RICS housing spokesperson Jeremy Leaf said the prospects for the market was mixed.
He said: “Although bad weather hit the housing market during December sales levels have remained stable. While lack of supply, and more importantly demand continues to impact heavily, surveyor sentiment does appear more positive for the coming months.
“The key issue now is mortgage finance. However, with commentators suggesting lending constraints are unlikely to be eased, it is hard to envisage a meaningful increase in sales levels in the near term.”