ResidentialAug 10 2017

House price growth weakest in four years

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House price growth weakest in four years

Falling house prices in south east England have led to the region’s weakest set of figures since 2011, according to the Royal Institution of Chartered Surveyors (Rics).

A majority of respondents to the latest Rics market survey reported falls in house prices in London and the south east during July, pushing down the average UK growth figure from 7 per cent to just 1 per cent – the worst reading since early 2013.

In contrast, much of the rest of the UK continued to see solid gains, led by Northern Ireland, the west Midlands and the south west.

Prices are expected to remain flat for the next three months, while a net balance of 28 per cent of respondents anticipate an increase over the next year – the worst reading since July 2016.

For homes marketed at more than £1m, 68 per cent of respondents reported sales prices coming in below asking prices, with 33 per cent saying the agreed price was up to 5 per cent below the asking price and 26 per cent reporting a figure between 5 per cent and 10 per cent below.

It (Brexit) is the biggest question mark the UK economy has had in my lifetime. No-one can see the other side of it, and we appear to be led into it by people I would not trust to walk my dog.Ruth Whitehead

Rics reported new instructions fell for the seventeenth month in a row, with stock levels on estate agents’ books remaining close to record lows.

Demand also remained subdued, with 4 per cent more respondents seeing a decline in new buyer enquiries.

In the lettings market, landlord instructions continued to fall, with 8 per cent of respondents reporting a decline in listings, while rents are expected to increase by a little under 2 per cent over the next 12 months.

Simon Rubinsohn, chief economist of Rics, said: “Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come.  

“One reason for this is the recent series of tax changes but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market. 

“And there are some very real consequences for the economy from all of this including the impact on the ability of people to be mobile when looking for work.”