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War in Iraq blamed for falling house prices

House prices have fallen for the first time in over two years because

of the war with Iraq and continued economic uncertainty, says the

Royal Institute of Chartered Surveyors.

Its housing market survey for England and Wales for the three months

up to February reveals that prices fell by around 5 per cent.

Although the fall is modest, it is a reversal of the continued rises

since the last quarter of 2000.

The RICS says prices have slipped back by varying degrees in all the

southern regions, with the biggest falls in London and the South-east.

Prices continued to rise fairly strongly in the northern regions,

while modest increases occurred in the East Midlands and Wales.

It says the war and the economic situation have led would-be buyers

to stay on the sidelines and take a wait-and-see approach.

But it believes there is potential for the housing market to rebound

quickly if the political situation stabilises.

Another sign of a slowdown is that 18 per cent of surveyors are

reporting a fall in prices while 59 per cent say they are stagnant

and just 24 per cent are still recording a rise.

Housing spokesman Ian Perry says: “The faltering housing market has

come in response to the growing fears about the situation in Iraq and

the direction of the UK economy.

“The latest survey shows that one of the last bastions of economic

endurance is no longer able to sustain its unprecedented growth in

the face of war and the economic uncertainty this has brought about.”

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