Nearly a third of surveyors reported falling house prices in January, according to a key industry survey, amid falling demand from potential buyers brought on by concerns over the possibility of interest rate rises.
Around 31% of surveyors said house prices had slumped during the month and 7% said there had been a decline in new buyer enquiries, the poll by the Royal Institution of Chartered Surveyors (RICS) revealed.
One of the possible reasons given by the RICS for the lack of interest in the housing market was that prospective buyers were worried about "the outlook for the economy and the possibility of mortgage rate increases later in the year".
It has been suggested that interest rates could be forced up from 0.5% as the Bank of England tries to curb the rising level of inflation. However, these fears have been eased to some extent after weaker than expected growth figures revealed a contraction in the economy in the final three months of last year.
The Bank of England will set interest rates at its monthly meeting this week and will reveal its decision on Thursday.
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