Gloomy outlook for UK housing market

Surveyors say the outlook for the UK housing market for the next three months is the worst for 20 years.

Members of the Royal Institute of Chartered Surveyors (RICS) predicted house sales will fall over the next quarter in the most downbeat assessment since records began in 1998.

Brexit uncertainty

Uncertainty over what will happen with Brexit was cited as the main reason for the decline, but lack of supply and affordability have had an effect too.

An increasing number of surveyors reported house price falls instead of gains across the country in December, making it the fourth month in a row of negative figures.

Decline

There has also been a decline in the number of fresh properties coming onto the market over the last six months, said RICS chief economist Simon Rubinsohn.

“It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued,” he said.

Muted

The Brexit effect was also blamed by the Office for National Statistics (ONS) and the Land Registry for the muted state of the market.

Average house prices across the country rose by just 2.8% last year and the average house price fell by 0.1% to £230,630.

Slow down

The joint report said there has been a slow down in house price growth over the last two years, driven mainly by slower growth in the south and east of England.

The lowest figures came from the capital itself where prices fell by 0.7% over the year to November.

Postponing

The report says London house prices have been falling since July of last year with both potential buyers and sellers pulling back to await the outcome of Brexit.

In contrast, prices have been on the rise in West and East Midlands (4.4%), the South West (4.3%) and the North East (4%).

Wait and see

Mortgage expert Kevin Roberts said: “The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the property market.”

Estate agent Jeremy Leaf added: “On the one hand, the risk of uncertainty for the property market increases after the Commons Brexit deal vote, but on the other, it helps to concentrate minds on all sides as the threat of a ‘no deal’ rises, which was reflected in sterling’s strengthening immediately after the result was announced.”