British house prices fell at their steepest pace in nine years in the three months to September, a survey showed yesterday, in the clearest sign yet that the once-booming property market has turned.
The Royal Institution of Chartered Surveyors' (RICS) seasonally adjusted house price balance fell to -30 in September - its weakest since June 1995 - from -12 in August which itself was the first negative reading in a year.
The balance is calculated by subtracting the number of surveyors in the survey who reported prices fell in the period from those who reported a rise.
Interest rate futures shot up after the survey's early release as the data heightened expectations that the Bank of England has nearly finished raising interest rates this cycle.
This follows five increases since November, 2003, which appear to have succeeded in slowing the British economy.
"The Bank of England is getting what it wanted. The housing market is slowing down with the economy, after consistent interest rate rises," said RICS spokesman Mr Ian Perry.
"The medicine is working. The slowdown is desirable from the point of view of market sustainability and may mean that further rates rises are unnecessary for the time being."
Despite the sharp fall in prices, RICS said it does not expect the housing market to experience a deep or prolonged downturn as long as the economy remains stable and the jobs market continues to be resilient.
The decline in buying activity was more pronounced in northern England and the midlands than in southern England, including London. Scotland was the only location where prices rose in September, the report said.
