HOUSE PRICES EXAGGERATED

[14 Mar 2006, My Finances]: House price prospects might be less bright than previously thought.

Doubt has been cast on recent figures suggesting that house prices are rising again as the property market strengthens.

In the last few weeks Rightmove, Halifax, Hometrack, and the FT have all reported hefty rises in house prices in February - with the only sour note coming from Nationwide, which recorded a small loss on the back of a large rise in house prices in January.

But today National Homebuyers released data from independent chartered surveyors suggesting the market is actually far weaker than these house price figures imply.

Nine surveyors in ten thought the market was at best "static" - with the largest number describing it as a "buyers' market".

"Unfortunately, it's going to be another challenging year for sellers," said Julian King, managing director of National Homebuyers.

"National Homebuyers deals with hundreds of customers who are still finding it difficult to sell their property. Whilst reasonably priced houses are selling well, too many vendors are given an inflated asking price, meaning their houses take longer to sell or stay on the market indefinitely."

Just 3.8 per cent of the 800 Royal Institute of Chartered Surveyors (Rics) members polled think the market is currently 'buoyant', while 2.1 per cent think there is 'reasonable demand', a paltry 3.1 per cent feel the market is 'satisfactory', and just 1.6 per cent think the situation is 'improving'.

By contrast, one surveyor in four (24.7 per cent) thinks it is now a buyers' market, almost as many (24.6 per cent) feel things are 'quiet', one in five (20 per cent) thinks the market is 'slow' and the same number thinks the market is 'static'.

But this picture changes regionally, with 30 per cent of surveyors in the south-west seeing the market as slow, and 35 per cent of surveyors in Wales seeing it as a buyers' market.

"In some areas of the country, only one per cent of surveyors felt that they were witnessing an upwards trend. It is clear from what surveyor's told us, that the market is not as healthy as many would have us believe," Mr King noted.

However, there were pockets of the UK with a healthier market.

In the north-west of England three times as many surveyors see the market as buoyant than the national average, and just one surveyor in nine feels there is currently a buyers' market in the south-east.