National house price growth nears zero as London and the South East drive down the UK average, according to a new survey, which also points to a continued lack of momentum in both property sales and enquiries.
The July 2017: UK Residential Market Survey, published by the Royal Institute of Chartered Surveyors (RICS), has also revealed that sales prices for more expensive homes (£1m+) are the most likely to come in below the asking price.
The survey found that the headline price growth gauge fell from +7% in June to +1% in July, suggesting that prices were practically unchanged for the period.
The RICS noted that this represents the softest reading since early 2013, but highlighted the fact that the national figure does not show the diverging regional trends across the country.
While house price-growth in South East England is negative, posting the weakest reading for this part of the country since 2011, Northern Ireland, the West Midlands and the South West are experiencing a firm up-ward trend.
Prices in London, however, continue to fall, as the pace of decline in July broadly matched the previous three months. Respondents in London reported a net balance of 48% for price declines in July, up from 45% in June.
Market deterioration is due, in part, to a sustained fall in new listings, according to the RICS, with new instructions having fallen for the 17th consecutive month. As such, the close to record low stock levels on estate agents’ books are limiting buyers’ options and encouraging them to stay where they are.
Political uncertainty and changes to stamp duty land tax are also said to have contributed to the slow down in price growth.
Commenting on the survey, Simon Rubinsohn, RICS chief economist, said:
"Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come."
"One reason for this is the recent series of tax changes but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market.
"The flatter trend in price growth is arguably a silver lining but there is no real indication that the housing market will become materially more affordable anytime soon."
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