The Royal Institution of Chartered Surveyors (RICS) housing market survey is a monthly measure of how many surveyors are seeing UK house prices rise compared with the number reporting a fall.
It’s arguably the best forward indicator of the country’s residential property market.
And today’s publication was a bit of a stunner. It showed that Britain’s house prices are dropping for the first time since July 2009.
The ‘headline price balance’ has slipped to –8 – i.e. 8% more surveyors are seeing falls than rises.
What’s more, the balance of ‘new instructions’ for sales has hit +33, its highest reading since May 2007.
What does this mean for house prices?
Take a look at this chart…
The RICS price balance moves in very clear cycles, positive to negative and vice versa. Here we’ve compared it with the year-on-year percentage change in the Nationwide house price index. And the key point is that we’ve ‘advanced’ the RICS survey balance by six months. So the picture rather speaks for itself. It looks very likely that within a few months time, UK house prices will again be falling year-on-year.