UK July new buyer enquiries fall at fastest rate in nearly 3 years

UK July new buyer enquiries fall at fastest rate in nearly 3 years - RICS

	Published : Tue, 14 Aug 2007 00:16 By : Agencies Print this Story

LONDON (Thomson Financial) - House prices in the UK grew below their long-run average in July as new buyer enquiries fell at their fastest rate in nearly three years in the wake of higher borrowing costs, a leading industry group said.

In its monthly survey of the housing sector, the Royal Institution of Chartered Surveyors found that a balance of 12.6 pct of its members reported that house prices rose in July rather than fell, the 21st consecutive monthly rise.

Though that is up on June's 10.6 pct and ahead of analysts' expectations of another modest decline to 10 pct, RICS said July's rate remained below the survey's long-run average of 21.6 pct for the second month running.

RICS found again that London drove the housing market ahead, closely followed by Northern Ireland, but that house price inflation in Scotland almost halved.

More alarming, RICS said, was that new buyer enquiries fell at their fastest pace since August 2004 and that the stock of unsold property on surveyors' books increased to their highest level since January this year.

In addition, survey confidence in sales turned negative for the first time since March 2003, when the war in Iraq started, while price expectations fell to their lowest level since June 2005, RICS said.

'The combination of softening demand and supply is causing market conditions to weaken further,' said Jeremy Leaf, a RICS spokesman.

'Buyer activity has pulled back a little over fears that we may have seen the top of the market,' he added.

The Bank of England has raised its benchmark rate a quarter point on five occasions to 5.75 pct over the last year in order to rein inflationary pressures, some of which have stemmed from the buoyant housing market.

It is widely expected to raise rates again in the next couple of months but soft consumption surveys and the turmoil in financial markets may mean rates go up later rather than sooner.

pan.pylas@thomson.com

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UK July new buyer enquiries fall at fastest rate in nearly 3 years - RICS