Activity in the housing market continuing to flatline – but there are signs price growth could pick up

The number of homes on the market is hovering around a record low level - PA

Activity in the housing market is continuing to flatline, according to the Royal Institution of Chartered Surveyors, but there were signs that price growth could pick up.

Its monthly residential market survey found there was a slight uptick in the number of respondents who were positive about price growth nationally in August, but that was deeply divided by location.

In London, the South East, the North and East Anglia, respondents reported that asking prices were falling, while in Northern Ireland, the North West, Scotland, and the South West, the outlook was more positive. In Central London, respondents were the most negative about price growth since 2008, and prices are expected to pick up everywhere in the next 12 months except the capital.

For the ninth straight month there was little change to the record low levels of buyer inquiries, and the number of agreed sales has not grown since November last year. The level of supply also fell slightly, nearing a record low.

It also found that 61pc of those polled said that they expect more landlords to exit the market in the next 12 months, due to changes to stamp duty and mortgage interest tax relief, in a bid to squeeze out buy-to-let investors. Research by Direct Line found that they are paying on average £6,500 more now on stamp duty with each additional property they purchase.

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Rics’ survey is a helpful indicator for the direction of the housing market. Those surveyed also forecast that over the next five years, average annual rental growth of 3pc will outpace that of house prices, at 2pc.

Simon Rubinsohn, Rics' chief economist, said: “The latest results continue to suggest that the greatest pressure on both prices and activity continues to be felt in prime central London market. Although there are some signs that the wider South East is also losing some momentum, anecdotal evidence suggests the impact is very location specific. Meanwhile the numbers for most other parts of the country point to a rather more resilient marketplace.”