‘First-time buyers are as rare as a buyer for Northern Rock’

Mar 12 2008 by Steffan Rhys, Western Mail

HOUSE prices in Wales fell for the ninth consecutive month in February, with the pace of decline re-accelerating towards December 2007 levels, according to figures released yesterday.

The Royal Institution of Chartered Surveyors’ Housing Market Survey shows that 49% more surveyors reported falling rather than rising house prices across Wales in February, 9% more than in January.

The figures led some economists to claim that house prices across the UK would fall by 5% for the next two years as the housing market cooled.

RICS said new buyer inquiries and new instructions to sell also declined for the seventh consecutive month in Wales, though the scale of decline eased considerably.

And while surveyor confidence in the housing market eased, there were not significant improvements from January’s record lows.

And according to government figures also released yesterday, the annual rate of house price growth across the UK fell to a 16-month low during January.

The Department for Communities and Local Government said annual house price inflation dropped to just 8% during the year to the end of January, compared with a rate of 8.4% reported in December.

In light of the figures, estate agents across Wales were fairly downbeat yesterday.

“It is a very slow period, probably resulting from the turbulence in the financial market,” said Paul Lucas, of RK Lucas and Son in Haverfordwest.

“There has been no major change since last month and it remains a buyer’s market. First-time buyers who were actively looking in January have all but disappeared,” said Dafydd Hardy, of Dafydd Hardy in Llangefni.

“There is activity but it’s like pulling teeth. Buyers are looking for good deals and are offering accordingly. First-time buyers are as rare as a buyer for Northern Rock,” said David Jones, of Jones and Redfearn in Rhyl.

“February was a quieter month than expected but there is still some activity out there. Negotiations are a bit more protracted than they have been in the past but while interest rates remain where they are there is no reason for any significant downturn in volume,” said John Davies, of JJ Morris in Cardigan.

However, Howard Archer, chief UK and European economist at Global Insight, said evidence showed the housing market was cooling markedly but not collapsing.

“The RICS survey reinforces the view that house prices will continue to soften over the coming months in the face of stretched affordability and tighter lending practices,” he said.

“Consequently, we continue to believe house prices are likely to fall by 5% in 2008 and 2009.”