House price fall ‘at 1992 rate’

House prices are falling at a rate not seen since 1992, according to the Royal Institute of Chartered Surveyors.

The surveyors’ body said that 49.1% more of its members reported a fall in house prices than saw a rise.

This is the biggest reported fall since November 1992, during the housing recession.

According to the Royal Institute of Charted Surveyors, house prices were hit by the successive interest rate rises seen last year, and also by lower numbers of mortgage approvals.

The RICS findings have been supported by other surveys into the housing market.

Information from the Department of Communities and Local Government showed that average house prices fell by 0.8% in November. Research by mortgage lenders Halifax and Nationwide also suggested that the housing market was weakening.

Ian Parry, spokesman for the Royal Institute of Chartered Surveyors, said: “The housing market is clearly feeling the pinch from the credit crunch and the round of interest rate hikes in 2007.

“However, supply would have to loosen considerably before prices experience a significant dip.”

The survey showed that housing supply remained strong, with the first increase in new instructions to sell for six months.

As a result of the fall in house prices, the Royal Institute of Chartered Surveyors said that a cut in interest rates may be necessary if the housing market is to remain stable.

The Monetary Policy Committee cut interest rates from 5.75% to 5.5% in December, but voted to hold rates at their January meeting.

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