Fresh signs of cooling house prices

HOUSE price rises have slowed to their lowest rate in more than a year, with London and the south east suffering the sharpest slowdown, latest figures show.

The market should continue to rise in 2002, the Royal Institute of Chartered Surveyors said. But the early New Year was likely to be 'subdued'.

During the three months to the end of November house price inflation across England and Wales slowed to its weakest rate of growth since October 2000.

RICS asked members whether they saw house prices fall or rise between September and November. For England and Wales, 2% more saw increases than those reporting falls, from 5% reported last month.

In the south east, 37% more surveyors reported falling house prices than those reporting an increase, from 28% in October. The figures were even worse in London, with 56% more painting a gloomy picture, compared with 53% last month. A RICS spokesman said: 'The rate of rises earlier this year were unsustainable and buyers have become increasingly reluctant to pay the asking prices.'

But in the north, surveyors reported steady increases in values. In Yorkshire and Humberside, for example, 40% more surveyors reported rises than falls, from 36% last month.

RICS said the market had 'steadied' following a knock in September after the terrorist attacks. Most surveyors remained 'upbeat' about prospects for 2002, thanks largely to interest rates being at their lowest level in four decades.

'Chartered surveyors are confident that the overall market will continue to be positive in the coming year,' the spokesman added. 'The prospect of a healthy economy and continued low interest rates on top of strong signs of interest from potential buyers suggest 2002 will continue the trend towards a more robust market, even though signs are that it will be subdued in the early part of the new year.'