Surveyors are increasingly negative about prospects for the UK housing market over the coming year with expectations for house prices and sales to continue falling.
They report Brexit and political instability are rocking buyer and vendor confidence. There is also little prospect of a recovery in the market this year.
Results from the Royal Institution of Chartered Surveyors (RICS) residential market survey highlighted the sluggish market and suggest it may get worse before it gets better.
Demand from new buyers nationally weakened slightly for the second successive month with RICS noting these recent results appear to be pointing to a renewed decline in new buyer enquiries.
The volume of new sales instructions coming to the market also deteriorated for a second month running leaving average stock levels on estate agents’ books close to record low levels.
Sales prices agreed dipped below zero, the fifth month where the national trend has shown little change in house prices.
And the time taken to complete a sale from initial listing has increased to approximately 19 weeks which is the longest duration since the measure was introduced to the survey in February 2017.
Regionally, the sales trend is flat to slightly negative in virtually all parts of the country with only Northern Ireland and Wales showing even a modest rise in sales during September.
Looking forward, near term sales expectations slipped for a fourth consecutive report at the national level, with the net balance coming in at -16%.
And expectations for prices are negative for the next three months and continuing to become less positive for the coming year.
Brexit top concern:
RICS chief economist Simon Rubinsohn noted that while there were a number of themes running through the comments of respondents this month, uncertainty relating to Brexit was top of the list.
“All of this is not surprisingly taking its toll on the sales market with the key activity indicator in the survey flat or slightly negative in all parts of the country apart from Northern Ireland and Wales,” he said.
“That said, the recent announcement from the prime minister that the Housing Revenue Account borrowing cap will be abolished is a bold move which over the time could help address some of the very real challenges facing those looking to buy or rent property. “There is no silver bullet that will immediately resolve this problem but encouraging new entrants to deliver affordable homes is certainly part of the answer,” he added.
Unrealistic vendors, falling buyer demand:
Former RICS residential chairman and north London estate agent Jeremy Leaf highlighted there had not been an autumn bounce-back that was expected, especially after a quiet summer.
“It is interesting that activity remains fairly flat nationally, which means London is still in negative territory, turning the old north/south property divide on its head,” he said.
“It is particularly disappointing that sellers seem reluctant to make their properties available in sufficient numbers, which would have improved choice and get the market moving in the period running up to Christmas.
“Our customers are still telling us that Brexit uncertainty is a factor in what has become a needs-driven market,” he added.
Emoov founder and CEO Russell Quirk agreed that the market would not be performing its usual post-summer sales encore.
“Of course, Brexit is having an influence. There is also a refusal by many to accept current market conditions and adjust their sale price expectations,” he said.
“This, in turn, is seeing buyer demand diminish as well as the fear of a potential hike in rates.”
However, he was hopeful that the market may recover slightly next year.