House prices continue to fall in London and south east

House prices continue to fall in London and south east

House prices have fallen again in London and the south east while the north west of England, Wales and Northern Ireland witness solid growth.

The latest Residential Market Survey from the Royal Institution of Chartered Surveyors (Rics) shows the UK housing market remained divided between a stronger north and west and a weaker south east during November.

London continued to see the most negative sentiment, with 54 per cent more respondents seeing a fall in prices rather than a rise, while East Anglia and the south east also reported negative trends.

Prices rose in every other part of the UK apart from the north east, with particularly strong gains in Wales, Northern Ireland and the north west.

This trend is expected to continue over the next three months, with house prices set to remain flat on a UK-wide level.

Rics said the marked decline in in new buyer enquiries over the previous couple of months appeared to moderate in November as five per cent more respondents noted a decline in demand compared to -19 per cent in October and -21 per cent in September.

Newly agreed sales were flat or negative across most of the UK, with the exception of Wales and Northern Ireland.

At the same time, new instructions to sell declined for the 22nd month in a row as the supply crisis continued, although stock levels on estate agents’ books held broadly steady.

In the buy-to-let market, interest from prospective tenants fell back on a non-seasonally adjusted basis for the first time since 2015, with the net balance down to -16 per cent.

New landlord instructions continued to decline, with near term rental expectations edging down from +9 per cent to +4 per cent.

Simon Rubinsohn, Rics chief economist, commented: “It is perhaps not surprising that the headline indicators for both prices and activity are subdued as Christmas approaches. 

“It remains to be seen whether the scrapping of stamp duty for first time buyers announced in the Budget will provide much of a lift for the market. There was not much evidence of this in the latest survey, which was conducted after the change in policy, and while most independent analysis casts doubt on whether there will be much follow through, it is still early days.

“However, if the move does trigger a wider debate about how best to tax property, it will serve a useful role.”

Oliver Marley, mortgage adviser and head of research at London-based Independent James, said he did not expect the stamp duty cut to have a big impact on the market, as most people would have been able to make up the deposit with help from their family anyway.

He added: "Although there is a limited supply of houses at the moment, it seems to be that there is little good supply of properties. There are enough properties out there with people expecting to sell for too high a price. If you need to buy on a owner occupier basis, you're being forced to settle for less out of necessity.