Brexit uncertainty has created the ‘weakest UK housing market figures for six years’ with buyers down, sellers down, prices down, and the next forecast the gloomiest since the EU referendum
- Survey by Royal Institution of Chartered Surveyors shows key indicators down
- More than half of respondents to RICS’ November poll blamed Brexit uncertainty
- Next quarter forecasts see worst month-on-month decline since referendum
Economic uncertainty caused by Brexit has pushed the UK property market to its weakest level in more than six years, a study has found.
More than half of respondents to a major survey by the Royal Institution of Chartered Surveyors (Rics) attributed low demand from both buyers and sellers down to ‘Brexit uncertainty’.
Rics’ chief economist Simon Rubinsohn said: ‘I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors’.
In Rics’ November 2018 market analysis, the number of people looking for a new home fell again. The net balance of -21 per cent, down from -15 per cent in October, was the lowest since September 2017.
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Weaker demand dragged down property prices. The price balance slipped to -11 per cent in November from -10 per cent in October, which is the lowest reading since September 2012.
House prices have been falling in London, the south-east and East Anglia, while in the south-west, east Midlands and north-east they have been broadly flat.
There were price rises in Northern Ireland, Scotland, West Midlands, Wales, Yorkshire and Humber and the north-west.
Mr Rubinsohn added: ‘It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market.
‘Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line.
‘Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon.
‘The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis.’
The number of new properties being listed for sale fell for the fifth consecutive report, and the net balance of -24 per cent was the fastest pace of decline in supply recorded in more than two years.
This lack of new stock is impacting estate agents’ stock levels with agents now only having, on average, 42.1 homes for sale.
The UK housing market is at its weakest for six years with buyers, sellers and prices all down
The number of new appraisals by property valuers is also down in comparison to a year earlier.
Forecasts for the next quarter are now bleaker than at any time since the EU Referendum result, falling from minus six per cent to -23 per cent – the most substantial decline in this number since June 2016.
In the rental market, demand from tenants was holding steady, while the flow of rental homes on to the market continued to slow, Rics said. This is expected to result in modest rent rises over the next 12 months, it added.
Hew Edgar, RICS Head of Policy, said: ‘RICS shares the resounding sentiment of frustration from our professionals operating in the UK’s residential sector; and we are not surprised by this month’s outcome.
‘Brexit was always going to be a very politically charged debate, but the current style of politics and continuing level of political uncertainty is significantly impacting the housing market and built environment.’
He said before the referendum experts believed Brexit would only affect high-end properties but not even those at the lower end of the market were ‘putting off decisions until there is more certainty’.
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