The Royal Institution of Chartered Surveyors (Rics) has reported a continuation of house prices falling. Not only are property prices gradually dropping but so to is the number of potential buyers. Enquiries about properties for sale has reduced for the tenth month running.

Most experts are in agreement that this was expected due to a combination of several factors.

• There have been 5 interest rate rises over the past year which has seen the Bank of England raise the base rate from 4.25% to 5.75%.
• Mortgage lenders have stricter lending rules now amid worries of a sub-prime catastrophe like the US has experienced.
• Hips (Home Information Packs) were introduced on 4 bed and 3 bedroom houses which may have stopped people buying or selling due to the added cost and workload involved in getting these packs ready.
• A global credit squeeze hit us this summer and as a result has caused wariness and uncertainty in the financial markets.

Areas most affected by this downfall of property value is through East and West Midlands and East Anglia. Despite this drop, London and Scotland are still experiencing a gentle rise.

A drop in confidence of consumers and home-owners has lead to this decline in home-buyers applying for mortgages and people wanting to move home. The future is uncertain and people aren't wanting to take risks at present, as it could prove to be rather expensive for them, especially those with poor credit ratings.

A gloomy outlook could be on the horizon for the next few months.

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