The balance of surveyors that reported house price falls increased again in January according to the Royal Institute of Chartered Surveyors (RICS).

The RICS house price balance dropped for the sixth month in succession, signaling half a year of negative market sentiment. Around 54.7% more chartered surveyors reported a fall rather than a rise in house prices, an increase from 49.1% in December.

According to its surveyors, the only part of the UK where prices continued to rise was Scotland with the net balance of surveyors reporting price rises rose from 3% to 7%.

The decline in demand picked up speed as new buyer enquiries fell at the fastest pace since October 2007. Prior to October, the previous occasion when buyer enquiries reached this level was August 2004. Around 35% more chartered surveyors reported a fall rather than a rise in new buyer enquiries, down from 25% in December.

This weak trend in demand is having a visible impact on the market despite a lack of supply. The stock of unsold property on surveyors’ books jumped by more than 10% and has increased by 40% since September 2007. Currently the average level of unsold property per surveyor stands at 85 – the highest level since February 1999 when the average figure per surveyor was 86. As a result, the ratio of completed sales compared to the stock of unsold property on the market fell to 28.6% down from 30.7%.

Jeremy Leaf, RICS spokesman, said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown. Tightening mortgage lending criteria is a block to many who are keen to take the housing market plunge. Agents are finding it difficult to market properties to an audience which has decided to watch the current economic theatre from the wings.
“However, if mortgage lenders filter the recent interest rate cuts into the market, demand should begin to increase. In the near term, the housing market will continue to be shielded from significant price falls while employment conditions are strong.”