The housing market in the south west continued to face challenges during October, as prices and activity continued to fall, according to the latest RICS UK Housing Market survey.
During October, 36% more chartered surveyors reported a fall rather than rise in house prices, down from 25% more in September.
Demand also turned negative for the first time in nine months, with 7% more surveyors seeing a fall in demand rather than rise, compared to a positive reading of 1% last month. Equally, those seeking to sell remained cautious with 16% more surveyors seeing a fall rather than rise in supply, compared to a positive 5% in September.
Completed sales also rose slightly, to an average of 17 per surveyor (by branch) over the past three months. Whilst still muted, this represents the strongest level since December 2009 and is one of the stronger averages in the UK. Respondents also note that if buyers are able to access finance, banks are taking a long time to agree lending terms, which is slowing down the purchase process.
Looking ahead, price expectations for the south west remain negative, with 24% more expecting prices to fall rather than rise over the next three months. In contrast, surveyors in the region are more positive for future sales, with 11% more predicting that sales will rise rather than fall over the coming three months.
RICS spokesman Roger Punch commented: “Devon and Cornwall are undoubtedly facing challenges, which aren’t helped by the chaotic events in the euro area threatening to spill over to the UK and continued economic uncertainties.
“Coupled with this, banks are still imposing tough conditions on loans to first time buyers, meaning any recovery in sales is likely to be relatively modest.”
Commenting on the local situation, Jeff Cole, from Wadebridge-based Cole Rayment & White, added: “Instruction levels are poor and the market is generally quiet but levels of sales are still encouraging.”