Uncertainty Continues to Dominate UK’s Housing Market

Another month, another UK house market report and more, liberal use of that word, ‘uncertainty’. This time, it’s the June report from the Royal Institution of Chartered Surveyors (RICS) that’s highlighting a tricky period on the UK’s housing market.

“Even though the UK’s general election has been and gone, the result hasn’t created a stable political situation,” said Knightsbridge estate agent, Plaza Estates. “Couple that with Brexit – which will likely loom large for years – and you’ve got two huge unknowns that are dominating home-buyer’s thoughts, across the spectrum from investors to home-buyer occupiers.”

Price Growth Slows Again

The RICS survey shows the house price balance fell again in June to +7, the lowest level since July 2016 and from +17 in May. A positive balance shows that more surveyors are reporting higher house prices in their region, but it’s clear there are many fewer surveyors who hold that view, than previously.

For the June survey, 44% of respondents said the election and uncertain political backdrop was the most influential issue, followed by Brexit which was cited by 27% of respondents.

That uncertainty didn’t just materialise in the prices measure. There were falls and slowdowns across most RICS survey measures:

  • Newly agreed sales.
  • New instructions for property to sell.
  • Expectations for price growth.
  • The 12-month outlook for sales activity.

“The UK housing market suffered a double blow of uncertainty as the election was held and the result didn’t really put anyone at ease,” said Robert Holmes. “There could be a minor revival in the summer as historically, it’s a busy time of year for estate agents, but we’re not expecting a huge improvement.”

According to the most up-to-date market snap shot of asking prices from online estate agent portal Rightmove, house prices stabilised in the early weeks of July after falling in June. The monthly index showed a 0.1% rise in asking prices of property advertised for sale on its website during the first weeks of July, compared with the same period in June. On an annual basis, house price inflation rose to 2.8% from 1.8% a month earlier.

North South Divide

Another detail the RICS survey highlighted, was a divergence between the north and south of the country. While house prices in the north of England were positive, in the south of England, and London in particular, surveyors were much more downbeat.

The survey showed 45% more respondents reported house prices fell in central London than those who said they rose, during June. Residential property prices in the south east and east Anglia meanwhile, were reported as being little changed from May to June.

RICS surveyors reporting in the north west and west Midlands, reported further strong rises, with prices balances of +28 and +33, respectively. And, the strongest prices gain was in Northern Ireland, where 41% more surveyors said house prices there rose, than those who said they declined in June from May.

“The continued disparity between house price movement in the north and south of England is a real sign that prices in the south are considered too high and are overvalued,” said LDG. “It will be interesting to look back on this point at the end of the year, to see if it signalled any step change in the relentless upward trajectory of UK house prices, however slow that rise has been.”

This article was provided by Property Division who are based in London. Property Division are London’s Property News Hub. For more information check out their website