Mark Savill, Director of Novahomes Ltd, adds a positive note to falling house prices…

Industry signs seem to be getting gloomier by the day. The latest RICS house price survey said 64.1% of surveyors had reported price falls. Amazingly there has been only 1 month worse than this in June of 1990 when 64.5% reported price falls. This is the seventh month in a row that the RICS have reported price falls by their members. The Council of Mortgage Lenders too reports 49% fewer mortgages than in August last year and for lower values – making a 52% reduction in the amount of borrowed money available for housing.

These figures show what the rest of us now know as fact. The housing shortage of 2007 was not really a housing shortage at all. The reality was an over supply of cheap money that artificially stimulated demand and fuelled house prices. Now that the money has gone the house prices are falling again.

The press is portraying this as negative, but this is great news for consumers. If you are a first time buyer falling house prices will enable you to get onto the ladder without having to take out a mortgage that is so large it will be bequeathed to your children. As someone looking to buy a larger house lower prices bring down the differential you will have to pay to move. As a would-be investor you should now be able to secure a property at a price where there is at least the glimmer of a sensible return. And finally the choice now available to buyers means they can choose the house they really want – rather then be pressured into buying the first thing they see – which often happened in 2007 when so little stock was available.

For many agents this is calamitous – for those whose primary motive is to make profit from selling mortgages this market will be undeniably tough. For those agents who are used to selling a house from the first advert these will seem like hard times indeed. For some of us we will see the re-emergence of a market we know and love; a market where the seller who has the best presented house that represents the best value for money attracts the best buyer. A market where good estate agency is what sells houses.

Ironically a lot of established agents predict the demise of web agency in this new market place where us ‘fly-by-nights’ will soon be gone come the tough times. I beg to differ – I would wouldn’t I – but looking at our price strategy and low overheads we are ideally placed to deal with lower turnover than many. In addition, a lot of us franchisees are experienced agents who became disillusioned with life in the High Street. Bring it on I say!