UK house prices fall faster

House price falls accelerated further in the three months to April as the number of new sellers rose at the fastest rate in more than two years, the Royal Institution of Chartered Surveyors said yesterday.

RICS said its seasonally adjusted house prices balance for April fell to -40 from a downwardly-revised -39 to reach its lowest since November. The ratio of completed sales to unsold property, which some economists consider a better measure of the housing market's strength than prices, remained unchanged at 29 per cent in April - off a low of 28 per cent in February.

"While sales have stabilised in recent months, they remain significantly down on last year's," said RICS spokesman Ian Perry.

The report said that ratio remained below the long run average of 37 per cent, suggesting that prices will remain under some pressure over coming months.

RICS also said the number of homes on surveyors' books rose in April to 74 homes per surveyor from 73 in March. Meanwhile the number of new sellers rose at the fastest pace since January 2003.

The Bank of England has kept interest rates at 4.75 per cent since August 2004 and until recently many people were fearing rates would rise further - one reason RICS gave for the deterioration of its April house price balance.

In recent weeks analysts have changed their forecasts to make room for a cut in interest rates by the end of the year as policymakers fret about slowing household spending.

RICS said the recent change in views should underpin the housing market in the second half of this year.

"A growing realisation that interest rates will not continue to rise could provide the catalyst for a gradual rise in sales in the second half of 2005," said Mr Perry.