Fool News: Fall In House Prices Speeds Up

House prices are falling at their fastest rate for two years, according to the latest figures from the Royal Institution of Chartered Surveyors (Rics).

The survey shows that in September, 14.6 per cent more surveyors reported a drop in house prices than reported a rise. This is a big jump from August's figures, when just 3.3 per cent more reported such a drop.

Surveyor confidence in both sales and prices took a knock in September, reaching their lowest levels since March 2003 and May 2005 respectively.

The number of new buyer enquiries dropped - for the tenth month in a row - and at the fastest pace since March 2003. Rics also states that in every area except London, the number of properties coming onto the market fell, for the fourth month in a row.

The group said the fall in buyer confidence was largely the result of the five interest rate hikes since August 2006, along with stricter mortgage lending criteria on the back of the recent global credit crunch.

Jeremy Leaf, a spokesman for Rics, emphasised that despite the drop in prices, "the underlying economy remains strong" and said that a major correction in the market "seems unlikely" while economic growth and employment conditions remain in good health.

There were also significant regional variations in the September figures; while the largest price falls were seen in East Anglia, Wales and the Midlands, smaller falls were reported in the south-east, south-west, Yorkshire and Humberside and the North West - and Scotland and London still saw prices rise.

However, buyers have good reasons to be wary. Earlier this week, the Council of Mortgage lenders (CML) said that interest-repayment burden on first-time buyers was the worst it's been for 16 years.

It seems that the nation's house-buying fever is cooling.