RICS issues warning over 'collapse' in number of housing transactions

The slowdown in the housing market is continuing apace as figures today revealed that the proportion of surveyors reporting property price falls rose for the ninth month in a row.

The latest survey from the Royal Institution of Chartered Surveyors (RICS) showed that 95.1% more surveyors saw house prices fall than rise in April, up from 79.4% in March.

But the study found that a tight supply of properties on the market has limited the extent of the price falls so far, with no sign of the "distress" sales seen in the 1990s house price crash.

The average number of unsold stocks of properties on surveyor books edged down, with the ratio of completed sales compared with unsold stock falling to 21.1% from 24.6% in March.

RICS said: "The scale of house price falls remains relatively small at this stage compared to past downturns.

"The lack of new instructions to sell property continues to provide a crutch to the market.

"Large numbers of distress sales - either repossessions or sales from those attempting to avoid the repossession process - have not yet appeared in the market place and, while mortgage arrears remain low and the employment situation remains strong, the lack of supply will continue to prevent large declines."

The price declines have, however, spread to all regions in the UK now, according to the RICS survey data.

Scotland had been the only region not to see more surveyors report falling prices in previous studies, but joined the rest of the UK in seeing the balance turn negative in the latest data.

Meanwhile, surveyors were unanimous in reporting declines in house values across East Anglia, the North and North West.

The credit crunch is also continuing to make it difficult for new buyers to secure financing, with 68% more surveyors noting a fall than a rise in new buyer enquiries, up from 51% in January.

RICS spokesman Ian Perry said: "The real issue is the collapse in the number of housing transactions. This has very real implications, not just for the property industry but also the high street and the wider economy."

A spokesman for the Department of Communities and Local Government said: "When looking at trends in the market, it is important to remember that UK house prices are 45.5% higher than five years ago.

"The current issue affecting the market is fundamentally about the supply of credit - a very different situation to the early 90s which was about high interest rates and unemployment.

"The long-term demand for housing remains high and the fundamentals of the economy are sound with low unemployment and historically low interest rates."