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Residential property prices across the UK slumped in April, according to the latest Royal Institute of Chartered Surveyors (RICS) housing market survey.

Across the UK, 19% more chartered surveyors reported property valuation falls rather than rises in house prices.

Expectations for future residential property prices also reached their lowest point with a net balance of 17% more respondents predicting further drops.

Demand from potential buyers was relatively flat during April 2012 as 5% more surveyors reported increases rather than decreases in new buyer enquiries (from +10% in March).

Meanwhile new instructions were stable as 1% more respondents reported falls rather than rises in new residential properties coming up for sale. Whilst the trend may appear flat, the level of supply has not seen any significant drops since July 2011.

April’s property transaction levels entered negative territory for the first time since September 2011, as 6% more RICS surveyors across the UK reported decreases rather than increases in transaction levels.

London was the only part of the UK to observe a residential property prices rise, while the West Midlands and Wales saw the most significant declines.

Whilst the RICS predictions for future property prices saw a notable dip, expectations for transaction levels once again remained positive with a net balance of +15% more respondents expecting sales to rise over the coming three months.

Global Director for Residential Property at RICS, Peter Bolton King, says: “With the recent surge in activity brought on by March’s stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall. Renewed concerns over the economy and talk of a double dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence. What’s more, the continuing lack of affordable mortgage finance is still hindering many first time buyers who cannot afford to get a foot on the property ladder.”

UK property repossessions increase

UK Property Repossessions are forecast to increase 22% in 2012

UK Property Repossessions are forecast to increase 22% in 2012

Economists expect the recession and rising unemployment to squeeze the already stretched household finances of thousands of struggling families this year and are warning UK homeowners and landlords of a sharp rise in residential property repossessions.

Record low Bank of England (BoE) interest rates and lower than expected unemployment figures kept property repossessions to relatively small numbers through the worst days of the first half of the recession and they eased again as the country struggled into a tepid recovery.

However, with a double dip recession inevitably looming, workers incomes failing to cover spiralling household costs, the Government’s economic cutbacks and welfare reforms starting to bite whilst the beleaguered private sector fails to replace jobs lost in the public sector, economists are fearing the worst.

The Council of Mortgage Lenders (CML) had already forecast a 22% rise in UK property repossessions for 2012 increasing the annual property repossession figures to around 45,000.

The property repossession figures include private residential properties where mortgage payments have lapsed and Buy-To-Let properties where landlords did not have <a title=”Landlord Insurance” href=”” target=”_blank”>Rent Guarantee Insurance</a> and have been unable to keep up with their buy-to-let mortgage repayments due to their tenants not paying the rent.

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Minutes from the last Monetary Policy Committee meeting show The Bank of England has sharply downgraded its growth forecast for the rest of the year, cutting their rate to close to zero, after having expected much stronger growth as recently as August.

The Minutes, released last Wednesday, show that the MPC voted unanimously to increase its quantitative easing programme by £75 billion, although discussed the possibility of raising it to £100 billion.

In its last quarterly report in August, the Bank estimated a 0.4% quarter on quarter growth for the last 3 months of the year and an annual 2.1% compared to the last quarter of 2010.

Independent analysts are beginning to downgrade forecasts for 2011 to below 1%. After the Minutes were released, the LibDem Business Secretary, Vince Cable, refused to rule out the possibility that there could be a double-dip recession.

In an outspoken interview, he admitted the “brutal reality” was that Britain’s economy is deteriorating.

During the week independent think-tank, the Centre for Economic and Business research, (CEBR), revised down its growth forecast for next year to 0.7%, below the Office of Budget Responsibility’s forecast of 2.5% and also revised down its growth forecast for this year to 0.6% from a range of 1% to 1.5%.

UK homeowners, property investors and estate agents are no longer debating whether house prices will fall, now it is how far and how fast property prices will fall.

With job losses, banks on the brink and recession knocking at the door, it’s difficult not to have a sense of déjà vu. Media headlines have been focusing on the double dip recession and the prospect of property price falls for weeks and confidence in the UK market has been shaky at best several times already this year.

The prospect of a double-dip recession could trigger more UK property price falls. For first-time buyers, the recession could offer a tiny glimmer of hope.

In 2008 both property buyers and banks were left reeling from the collapse of Lehman Brothers, which crippled credit markets and saw Britain dive headlong into the deepest economic downturn since the great depression of the 1930’s.

The UK property market has struggled to recover over the last few years with buyers forced to overcome the banks insecurities about lending.

For 3 years, property buyers have been jumping through whatever hoops were deemed necessary by banks, in order to be considered for a mortgage. Even then, some of the limited mortgage products that were available had more clauses and stipulations than an MP’s claim for expenses, with a hefty arrangement fee on top.

Overall property prices in 2010 were fairly steady, but now property prices are falling again.

Is the UK headed for a property crash? The question now being asked is not whether house prices have further to fall, but how fast and how far they will drop.

Property pundits in the media have already begun to fuel the debate, speculating that the UK property market is heading for a spectacular crash similar to the one that devastated the USA housing market.

Data from various UK housing market surveys are often conflicting, however, in recent months the results have been almost uniformly downbeat.

Two of the UK’s biggest lenders, Halifax and Nationwide have both reported year-on-year falls in house prices in recent weeks.

Data from the Land Registry showed sales in June 2011 were down 13% on 2010 before the Eurozone financial crisis had hit.

Property website Hometrack fuelled fears of more property price drops ahead as its latest survey of England and Wales showed a fall in new buyers coming to the market.

Hometrack also said property prices had fallen for the 15th month running in September 2011.

In October 2011 potential property buyers are finding it easier to get mortgages and up until last month 2012 had been predicted to be fairly stable.

There is one key factor that will help the UK stave off a USA type crash, Demand, and that still remains relatively high compared to the current supply. If people are not going to buy, they will rent!

The number of Estate Agents in the UK has fallen from 16,000 at the peak of the market in 2007 to less than 9,000 says Hometrack.

That is also reflected in the drop in transactions from an average 1.25 Million per year up to 2007 to less than 700,000 in 2010.

Hometrack is forecasting that prices will have dropped 2% this year and will come down at the same pace again next year.

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