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Recession fears return as house prices dip

Recession fears return as house prices dip

Category: Economy

Updated: 10/08/2010
First Published: 10/08/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There are fears that the economy could slip back into recession after new data suggested house prices had fallen for the first time in a year in July.

The Royal Institution of Chartered Surveyors said an increase in the amount of homes being put up for sale combined with a drop in enquiries from potential new buyers had seen prices drop for the first time since July last year.

The survey reported that homebuyers had been experiencing difficulty in securing a mortgage, while there was also increasing uncertainty about the prospects for the economy.

The abolition of home information packs meant that home sellers were now more willing to test the property market waters, hence the rise in the number of homes for sale.

Surveyors now also expect house prices to fall over the coming months.

The latest data from Communities and Local Government looking at the month of June also supported the suggestion of a slowdown in the market.

Its figures revealed that UK house prices had remained unchanged from May, although they were still 9.9% higher than a year earlier.

The average price of a home in the UK in June was said to be £210,775.

RICS spokesperson, Ian Perry, said the fall in his organisation's house price measure was broadly consistent with most other recent data that had been released.

"This is a reflection of both the increase in supply following the scrapping of HIPS and the more cautious stance from buyers," he added.

"Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties."

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