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House sales at two-year low, says Rics

Number of sales handled by each surveyor is just 14 a month, as every region except London experiences house price falls

The continuing global economic crisis hit the housing market last month as the number of house sales dropped to a two-year low, according to the Royal Institute of Chartered Surveyors (Rics).

It said the number of sales handled by each surveyor in the three months to the end of August dipped slightly to 14 – the lowest level since June 2009.

The “subdued” nature of the market was blamed by 79% of surveyors on “general economic uncertainty”, while 66% said a lack of mortgage finance was responsible.

About 40% said buyers were staying away because they were worried about future falls in house prices. This was particularly true in Northern Ireland where falls have been particularly severe.

Surveyors said the “sluggish” market was translating into falling prices, with a balance of 23% saying prices had fallen, up from 22% the previous month.

Every region saw falls in house prices apart from London, where the balance of surveyors who saw an increase reached a 15-month high.

East Anglia and the West Midlands saw the most severe declines, with a balance of 62% and 63% respectively reporting falls.

Rics housing spokesman, Alan Collett, said: “For the time being our indicators suggest that demand for homes remains broadly steady, albeit at relatively low levels – despite the renewed bout of economic gloom.

“However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.”

A balance of 3% of surveyors reported a decline in new buyer enquiries, signalling that demand is set to continue falling.

Surveyors had become more pessimistic about future house prices, with a balance of 23% expecting them to fall over the next three months, up from 13% the previous month. But surveyors were hopeful of a modest pick-up in activity over the coming months.

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