New report calls for caution on house price recovery

06/08/2009

Britain's housing market still has a long way to go to recover from the credit crunch, an influential industry group pointed out today.

The Royal Institution of Chartered Surveyors (Rics) issued the comments in the wake of a raft of new reports, all apparently suggesting that house prices will recover soon.

Earlier this week, the Halifax index suggested that the typical home rose in value by 1.1 per cent last month.

Meanwhile, the Land Registry recently pointed out a 0.1 per cent rise for June - the first time positive monthly growth has been seen on the survey since the beginning of 2008.

Over the intervening months, the financial crisis has put strong downwards pressure on prices - resulting in millions of people being pushed towards negative equity in their mortgages.

Lending conditions have also tightened drastically, leading to more people struggling with their mortgage costs and being pushed towards repossession.

Rics said that the market remains "very weak" when compared with how it was before the crisis began.

The organisation's senior economist, Brigid O'Leary, added: "The outlook for 2010 is fairly uncertain and there is a real risk that prices may slip back again.

"Affordability is still stretched and mortgage finance, while improving, is fairly hard to come by."

Tags; Current UK Economy, Young Family Finances,

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