Fears of a double-dip recession rose yesterday after estate agents reported price falls for the first time in a year.
According to the Royal Institute of Chartered Surveyors (RICS), demand from buyers is falling just as the number of properties coming on the market increases.
RICS said the majority of estate agents have seen a fall in house prices over July, with Business Secretary Vince Cable admitting that a double-dip recession could be on the cards.
‘The government’s own forecasting risk puts it at something like one in four, one in five,’ he says.
While London and the North West are continuing to see a rise in house prices and Scotland and the South West are experiencing a stable market, the rest of Britain is suffering a slump.
RICS spokesman, Ian Perry, says: This is a reflection of both the increase in supply following the scrapping of HIPS and the more catious stance from buyers.’
Another major obstacle here is the refusal of banks and building societies to offer home loans, with the average price of a first home costing 4.6 times the average gross salary.
‘However, agents are still generally optimistic about sales activity, which should benefit from more realistic pricing of properties,’ he added.