Brits See More House Price Falls

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LONDON - It may not yet be a "crash," but property prices in Britain are falling at a rate not seen since the early 1990s, increasing the pressure on the Bank of England to cut interest rates at its February meeting. The Royal Institute of Chartered Surveyors (RICS) said that in December, 49.1% more chartered surveyors reported a fall, than a rise, in house prices, compared with 40.6%, in November. That's the sharpest increase since November 1992, when the rate rose by 60.1%. Many price declines also took place in London, where strong demand has traditionally kept prices resilient. London prices began to fall in December. (See: " Blimey! London Property Slides") The RICS said 25.0% more surveyors reported a fall in buyer inquiries, while stocks of unsold property on surveyors' books rose 7.1%. "The very weak December RICS survey will heighten concern that the housing market is headed for a sharp correction in the face of stretched affordability, and tightening practices resulting from the credit crunch," said Howard Archer, chief U.K. economist at Global Insight. The data, which is an indicator of sentiment and future house prices, rather than current figures, is closely watched by the Bank of England, and will intensify the pressure on the central bank to cut interest rates to 5.25%, from 5.50%, at its next meeting on February 7.

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