House prices in the UK have declined faster than expected in January amid continued growth in property sales, according to the Royal Institution of Chartered Surveyors (RICS).
RICS house price balance fell to a seasonally adjusted -4 percent in January from -1 percent in December. A level above zero indicates that more respondents in the RICS survey of estate agents reported a rise in prices, while a minus reading indicates more reported a decline.
Analysts had expected the house price balance to fall to -2 percent in January.
In contrast to the general trend, prices remained in positive territory in London and the southeast, while Wales has moved into positive territory for the first time since the early part of 2010, according to the survey.
RICS noted that new-buyer enquiries fell during January, with a net balance of 9 percent of surveyors suggesting a decline. Additionally, the number of homes coming up for sale declined slightly amid poor weather conditions.
Nevertheless, the outlook for home values has improved as property sales continued to rise for the fourth straight month, suggesting that the "very worst" may be over for the housing market.
The surveyors reported a further increase in the number of newly-agreed sales with a net balance of 15 percent more stating that levels rose.
"Price falls across the UK have gradually stemmed in recent months and it is interesting to see that the amount of completed transactions is on the rise, as confidence returns to the marketplace," Peter Bolton King, RICS global residential director, said in a statement.
"While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve."
Looking ahead, the surveyors expect stable house prices over the coming three months and a little increase later in the year. Future housing transactions are expected to remain high.
The Bank of England's Funding for Lending Scheme (FLS) have been helping home buyers, as evident from the increased amount of mortgages and home sales. BOE data released on 30 January showed that mortgage approvals rose more than economists' forecast in December.
Nevertheless, the lower end of the market is not benefiting from the scheme, as lending requirements are still beyond their reach, RICS said.
"High house prices and the lofty deposits required by many lenders continue to prevent many first time buyers from getting a foot on the ladder, which is preventing any significant movement at the lower end of the market".