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RICS: Oversupply of housing to reduce prices

A glut of new houses coming on to the market - following the abolition of home information packs, coupled with reduced demand - should lead to house price falls in the future, according to the RICS Housing Market Survey.

In the monthly survey, the balance of surveyors reporting increasing house prices fell to +9 in June, compared to +26 in May, the lowest reading since July 2009.

The survey measures the proportion of surveyors reporting a rise in prices minus those reporting a fall.

Buyer interest also fell for the first time this year, with the survey balance falling from +8 in May to -5 in June.

This means that more surveyors than was previously the case are reporting falling selling prices, while buyer interest has turned negative.

Stocks of houses coming onto the market have also increased, with each surveyor participating in the survey having an average of 66.6 houses on their books. This is an 8.1 per cent increase in just one month and does not bode well for house prices.

The abolition of home information packs has made it cheaper to bring a house to market and sellers previously put off have taken advantage of this change in the rules.

Changes to the rules on capital gains tax have also increased the number of houses for sale.

Quinton Scott surveyor Justin Knight said: “The question before the budget occupying the minds of vendors was
higher taxes, now that we all know, the amount of new stock coming to the market has increased. I expect to see
this continue with a little more activity from applicants.”