The property market failed to benefit from its traditional spring bounce this year as the run of bank holiday weekends hit activity levels, while concerns about the economy and the ongoing problems in the mortgage market also affected demand.
The Royal Institution of Chartered Surveyors said estate agents sold an average of just 14.7 properties in the three months to the end of May, the equivalent of only one sale a week and the lowest level since the start of the year.
They also continued to report falling house prices, as potential buyers stayed away from the market, but more homes were put up for sale. The fragile state of the property market was further highlighted by figures from Communities and Local Government, showing house prices dropped by 1.1 per cent during April.
The latest slide left the average UK home costing £204,439, nearly £4,000 down on the start of the year and 0.3 per cent less than 12 months earlier – the first time annual house price inflation has been negative since October 2009.
House prices were lower in nine of the UK’s 12 regions than they were a year ago, with Northern Ireland continuing to register the steepest falls at 15.2 per cent, followed by the North East at 4 per cent and West Midlands at 3.8 per cent. The southern regions of London, the South East and the East are now the only areas where house prices are higher than they were 12 months earlier.
But even here growth is muted, with London posting a 3.6 per cent rise, while prices are 1.1 per cent and 0.8 per cent higher in the South East and East respectively.
Meanwhile, the balance of chartered surveyors who reported seeing price falls in May rose to 28 per cent, compared with 21 per cent in April, the highest level since the beginning of the year and the first increase since October 2010.
At the same time, 2 per cent more surveyors reported a fall in inquiries from potential buyers than those who saw a rise, with many blaming the bank holidays for the subdued demand.
But the number of people putting their homes up for sale continued to rise, with a balance of 15 per cent of surveyors reporting an increase in instructions.