Housing market sentiment is at its weakest since after the Brexit vote, say surveyors
London and the south east of England led a decline in house sales in September, the Royal Institution of Chartered Surveyors said.
Housing market sentiment has reached its weakest levels since just after the Brexit vote as house hunter and property sales numbers fall back, surveyors reported.
In September, a net balance of 20% of surveyors saw a fall in demand from potential buyers rather than an increase – marking the weakest reading since July 2016 – the Royal Institution of Chartered Surveyors (Rics) said.
Alongside this, 15% more surveyors reported a fall in agreed sales rather than a rise, which was also the weakest finding on this measure since July 2016.
Rics suggested that the possibility of a rise in the Bank of England base rate from its current low of 0.25% and affordability constraints are contributing to caution among buyers.
London and the South East drove the decline in sales, but the weakness in transactions was widespread during September, Rics said.
Only Wales and the South West were said to have seen an increase in sales, while sales were flat elsewhere in the UK.
House prices across the country held steady, with 6% more surveyors seeing a rise in prices rather than a fall, indicating a small increase in house prices.
London is seeing “firmly negative” house price growth, while prices have also been on a downward slope in the South East for four months in a row, albeit to a lesser extent than in London.
East Anglia and the North East also posted modestly negative readings for house price inflation.
But away from these areas, price growth remains “relatively robust” across the rest of the UK, with Wales, the north west of England, Scotland and Northern Ireland all seeing prices rise, Rics said.
But Northern Ireland and Scotland were the only two areas where surveyors were confident that prices will keep going up over the next few months.
Surveyors expect prices to be higher in all regions apart from London in a year’s time.
Rics chief economist Simon Rubinsohn said: “The stark divergence in key readings from the latest Rics survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time.”
He said this will partly be due to affordability constraints hitting higher-priced parts of the market.
Mr Rubinsohn continued: “It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over 10 years.
“That said, we are continuing to see evidence of shortage of stock both in the new build and second-hand market…
“Against such a backdrop, prices in general are likely to remain elevated and indeed, as the survey indicates, continue to rise over the medium term in most parts of the country.”