Interest from UK house buyers has dropped for the first time since March 2015, as uncertainty continues to affect the market, according to the latest Royal Institution of Chartered Surveyors survey.
Following the buy-to-let rush that preceded the 1 April tax increase deadline, and with continued uncertainty caused by the EU referendum, interest from buyers dropped in April, with 22 per cent more chartered surveyors reporting a drop in demand.
As the market continues to be hampered by uncertainty, sales are forecast to remain flat over the coming three months, with the outlook in London being significantly worse than other parts of the UK – 22 per cent more respondents in London expect sales to fall over the next three months for instance.
Despite the drop in demand from buyers, prices have continued to increase - although at a more moderate pace - across the UK in April.
Outside of this broad trend were modest declines in central London and flat prices in the north of England.
Rics chief economist Simon Rubinsohn said uncertainty was a word that featured heavily in the feedback received from members responding to the survey.
He said: “More ominous is the expectation that both prices and rents will head materially higher over medium term, despite existing affordability concerns with the supply pipeline continuing to fall short of household growth; notwithstanding the various levers the government is pulling to try and drive development.”
Jeremy Leaf, a former Rics chairman and north London estate agent, said the lack of instructions is forcing property prices up, but more worryingly the number of transactions is falling.
“The chancellor wanted to level the playing field between investors and first-time buyers, which he has with increases in stamp duty and the reduction in mortgage interest relief for landlords.
“But this has not been sufficient to encourage enough first-time buyers and other purchasers into the market to make up the shortfall; other groups are not taking up the slack and grasping the opportunity enough even though interest rates are low.”
peter.walker@ft.com
