UK house prices continue to fall - RICS

UK house prices continued to fall in September, an industry survey showed on Thursday, as higher interest rates and mortgage costs weighed on demand.

According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, house prices remained on a "downward trajectory" in September with a net balance of -69%, compared to -68% a month earlier.

The net balance is the proportion of respondents reporting a rise minus those reporting fall.

Demand was also sluggish, with the new buyer enquiries balance at -39%, although that was an improvement on August’s -46%.

Agreed sales also remained in negative territory, at -37%, with respondents expecting sales to continue falling in the next quarter, with a net balance of -24%.

House prices were also expected to fall going forward, although at a slower pace than previously forecast. A net balance of -33% expect prices to continue falling over the next year.

Tarrant Parsons, senior economist at RICS, said: "With mortgage affordability still incredibly stretched, it is unsurprising that buyer activity across the housing market remained subdued in September.

"Although the decision to pause monetary tightening a few weeks ago provide a glimmer of relief for the market, interest rates are likely now set to remain on hold for a prolonged period.

"As such, it appears there is little prospect of trends deviating much from the recent picture in the immediate future."

RICS added that it supported Labour’s plans, announced earlier in the week, to build 1.5m new homes should it be elected.

"Suggestions of reform to local planning laws, making development more accessible, are also promising," it added. "Our survey once again shows clearly that housing supply for buyers and renters remains at critical levels."