House prices 'on the brink'

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House prices are tumbling at a rate not seen since the market crashed in the early 1990s, new figures reveal.The decline is a sign that buyers' confidence is low and demand is falling, the Royal Institution of Chartered Surveyors is warning. Its statistics show that nearly two-thirds of surveyors saw prices falling in December and virtually none say they are rising. The gap between the two figures is the worst since November 1992, when the market went into meltdown. The balance has shifted dramatically in just a few months – in May last year the numbers seeing rises and falls were almost the same. Many more surveyors are now reporting a fall in the number of people seeking to buy a new home in December than are reporting a rise. Their confidence in the market is also at its lowest level since October 1998. The slowdown is being blamed on interest rate rises last year and lenders tightening criteria on mortgages. However, the RICS says market conditions are better than before the 1990s crash. Separate research published today by moneysupermarket. com also shows the average cost of a fixed-rate mortgage has increased marginally – despite last month's 0.25 per cent interest rate cut. Meanwhile, a Government study claims home information packs have not hit house prices.

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