London House Prices Predicted To Fall
Thursday 10th July 2014
The majority of surveyors in London say they expect house prices to fall in the capital in the next three months.
Tougher mortgage lending rules that came in earlier this year are thought to be to blame for buyers showing less interest.
It is the first time in over two years in the region that the Royal Institution of Chartered Surveyors' (Rics) measure has turned negative.
Inquiries from potential buyers in the capital are slipping back, suggesting that the very sharp upward movement already seen in prices is set to "flatten out", Rics said.
The rules, which came in in April, mean that people wanting to buy a home or remortgage have to
undergo more detailed questioning about how they spend their money, to
make sure that they can afford their mortgage repayments.
The Bank of England has also recently announced new curbs for the mortgage market, saying that loans of 4.5 times a borrower's income or higher should account for no more than 15% of new mortgages issued by lenders.
Simon Rubinsohn, chief economist at Rics, said: "The Bank of England's recent introduction of a ceiling on high loan to income lending and a 3% interest rate stress test is unlikely on its own to have an immediate influence on the market.
"However, rhetoric from key officials at the Bank, including Mark Carney, alongside the consequences of the introduction of the MMR are already slowing momentum, particularly in London."