Gap between asking and selling price narrows...

From the latest RICS survey:

Almost 60% of surveyors are now reporting that the gap between asking and selling price of houses is narrowing according to RICS research published today.

It said that across the UK, houses are selling at an average of 11% below the asking price with sellers in some regions being forced to accept as much as 26% discount off their advertised price.

This is the kind of story that sends a shiver down my spine. If true, we could be on the verge of a return to the bad old days of the bubble.

We have seen a couple of these "housing market recovery" stories over the last month or so. Mostly, they have been produced by industry insiders, such as the RICS or mortgage lenders.

In many respects, this story from the RICS is typical. It reports what appears to be some good news. However, the "uptick" is relative to an absolutely dreadful baseline. Even this report indicates that market conditions are forcing some homesellers to take a 25 percent discount.

However, behind these numbers is something distinctly darker and more malign. It is the Bank of England's policies. The BoE is busily cooking up a tidal wave of liquidity. Sooner or later, this wall of cash will hit the housing market, and it doesn't take too much imagination to see what happens next.