Home Insurance News
House prices continue to cool
Home Insurance News - Published: 13/11/2007
There was further evidence this morning that house prices are slowing.
The Royal Institute of Chartered Surveyors (Rics) said its members registered a negative sentiment for the third consecutive month.
Surveyors reporting a fall in house prices in October outnumbered those reporting a rise by 22.2 per cent.
This compares to 14.9 per cent in September, making it the sharpest decline in sentiment since July 2005.
However, Rics cautioned that despite this rather gloomy outlook, supply issues continued to prop up prices.
"A decline in transactions may be in the offing as stalemate returns to the market, although a material fall in prices would require a weaker labour market prompting forced sales," said Rics spokesman Ian Perry.
"Credit market turmoil has yet to put downward pressure on prices in the capital although prices have now stabilised even here.
"Significantly, London is the only region where new instructions have risen over the last two months indicating that more leveraged buyers at the margins may already be feeling the credit squeeze," he added.
Last week the Bank of England opted to leave interest rates at 5.75 per cent, despite speculation that there could be a cut.
Analysts though do expect to see some reduction in the cost of borrowing in the coming months, in a bid to stop the economy from slowing too fast.
Such a move would be welcome by hard-pressed homeowners, who are already facing higher energy bills and rising home insurance premiums.
The Royal Institute of Chartered Surveyors (Rics) said its members registered a negative sentiment for the third consecutive month.
Surveyors reporting a fall in house prices in October outnumbered those reporting a rise by 22.2 per cent.
This compares to 14.9 per cent in September, making it the sharpest decline in sentiment since July 2005.
However, Rics cautioned that despite this rather gloomy outlook, supply issues continued to prop up prices.
"A decline in transactions may be in the offing as stalemate returns to the market, although a material fall in prices would require a weaker labour market prompting forced sales," said Rics spokesman Ian Perry.
"Credit market turmoil has yet to put downward pressure on prices in the capital although prices have now stabilised even here.
"Significantly, London is the only region where new instructions have risen over the last two months indicating that more leveraged buyers at the margins may already be feeling the credit squeeze," he added.
Last week the Bank of England opted to leave interest rates at 5.75 per cent, despite speculation that there could be a cut.
Analysts though do expect to see some reduction in the cost of borrowing in the coming months, in a bid to stop the economy from slowing too fast.
Such a move would be welcome by hard-pressed homeowners, who are already facing higher energy bills and rising home insurance premiums.
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