Housing Market 'To Slow Ahead Of EU Poll'

The UK housing market looks set for a slowdown in the run-up to June's referendum on EU membership, according to surveyors.

Price growth for the next three months is expected to fall to its slowest place in almost a year, according to a poll by the Royal Institution of Chartered Surveyors (RICS).

RICS said its members still saw strong underlying upward pressure on the housing market.

But in the nearer term they expect price increases to slow due to the referendum as well as Scottish and Welsh elections in May.

Shares (Berlin: DI6.BE - news) in FTSE 100 house builders fell, including a 6% drop for Charles Church owner Persimmon (Other OTC: PSMMF - news) , despite a trading update showing forward sales up 8% to £2.15bn for the year-to-date. Berkeley, Barratt and Taylor Wimpey (LSE: TW.L - news) shares were also lower.

Simon Rubinsohn, chief economist at RICS, said: "Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May's devolved elections are no exception.

"Likewise, the EU referendum is likely to be an influencer in terms of the damper outlook for London in particular."

Meanwhile the effect of a rush to beat a 1 April stamp duty increase for buy-to-let investors has also now ended, taking some of the heat out of the market.

Mr Rubinsohn said: "As expected, the buy-to-let rush has now run its course, and as a natural result, the market is starting to slow."

RICS's index for price increases for the next three months was +17 in March from +21 in February, its lowest since April 2015 - a month before last year’s General Election. Its monthly house price balance fell to a nine-month low of +42 from +50, below economists' forecasts.

However, the survey said that over the longer term prices are still expected to rise by more than 4% a year for the next five years across England and Wales, as demand in the housing market continues to outweigh supply.