Housing Market to Stagnate

The Royal Institute of Chartered Surveyors (RICS) has released figures which suggest the number of sales could fall by as much as 40% this year. Additionally, they have forecast that house prices will fall by approximately 5% this year.

RICS remained concerned about the effect a severe slowdown in house sales could have, with consumer spending likely to fall by around 8% during the year as a result of reduced spending on furniture, carpets and home improvements.

The figures seem to support the views of other industry commentators, who believe talk of a 30% fall in house prices to be nothing more than scaremongering with little basis in fact. Indeed with interest rates forecast to remain level, and unemployment relatively stable, there does not appear to be huge scope for significant increases in arrears and repossessions.

There is a significant body of opinion that believes that homeowners will simply not accept that they have to effectively give their home away, and will sit tight and ride out the current difficulties. These latest figures from RICS seems to suggest this is exactly what is happening.

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