House prices becoming more realistic

However many potential deals continue to be frustrated by lack of mortgage finance.

The RICS house price balance improved slightly in July, for the third consecutive month, but still remains at a significantly low level.

In Worcestershire, 93 per cent more chartered surveyors reported a fall than a rise in house prices with the inability of many to secure mortgage finance reflected in the collapse in transactions.

The average number of transactions per surveyor over the last three months is now at 15 and the net balance of newly agreed sales remains in negative territory.

Charles Robinson of Worcester agent’s Griffiths and Charles and RICS West Midlands spokesperson, said: “There is no denying the fact that the property market is in a state of flux.

"Factors such as the lack of full mortgage finance and stability of the economy has dented potential buyers’ confidence and consequently, their urgency to commit has deteriorated.

"That said it’s not all doom and gloom with signs of sales activity amongst vendors that have priced their property as realistically as possible in light of what is a tough market.”

Last month, new buyer enquiries in Worcestershire declined again with 25 per cent more chartered surveyors reporting a fall than a rise compared to 35 per cent in June and 50 per cent in May.

In June, surveyors reported that predatory buyers again hunting for property.

This month, surveyors report that “realism” has returned to the market with many sellers dropping asking prices to more realistic levels.

New instructions to sell property in the county edged closer to positive territory with five per cent more chartered surveyors reporting a fall than a rise.

Although the current period of economic weakness has led to higher levels of unemployment, the latest repossession figures still remain well below the levels seen in the early 1990’s.