House price inflation dropped further in June, as political uncertainty stifles the housing market with agreed sales, new buyer enquiries and new instructions on the decline, according to a new market survey.
The RICS Residential Market Survey for June has revealed that at a national level, 44% of those surveyed said that domestic political uncertainty was the biggest factor contributing to the state of the market. By comparison, 27% highlighted Brexit as the most important factor. Respondents in London, however, cited Brexit and the changes to Stamp Duty as the reasons behind the loss in momentum.
June’s survey results show that 7% of surveyors across the UK witnessed a rise in prices at the headline level. However, compared to 17% of surveyors seeing a rise rather than a fall in May, this makes it the lowest reading since July 2016.
The trend is not reflected across the whole country. While the pace of decline in house price inflation in Central London continues, with 45% more respondents seeing a decline, in Northern Ireland 41% more surveyors saw a rise in prices. In Wales 38% more respondents also saw a rise rather than a fall.
Prices continue to rise in the West Midlands and the North West as well (+33% and +28% respectively), whereas the South East and East Anglia are showing a flatter trend.
Overall activity and transaction levels were subdued in June. Respondents reported a decline in newly agreed sales and 5% more also saw a fall in sales. The decline reflects the lack of stock coming on to the market and greater caution from buyers.
RICS predicts sales to remain broadly stable over the next three months, but the twelve month sales expectations indicator reading, while still pointing to an increase in activity, has slipped to its lowest level since the referendum.
New instructions fell again for the sixteenth month in a row, as 19% more respondents reported a fall in property coming on to the market, and average stock levels have slipped to a new low. Both of these factors are significant for future activity.
Simon Rubinsohn, RICS Chief Economist, said: “The latest results demonstrate the danger, however tempting, of talking about a single housing market across the country. RICS indicators particularly regarding the price trend are pointing towards an increasingly divergent picture. High end prime properties may be seeing prices slipping back but, for good or ill, prices are continuing to move higher in many other segments of the market. Indeed, the disaggregated data suggests that this will continue to be the case over the coming months.
“Perhaps not surprisingly in the current environment, the term ‘uncertainty’ is featuring more heavily in the feedback we are receiving from professionals working in the sector. This seems to be exerting itself on transaction levels which are flatlining and may continue to do so for a while particularly given ongoing challenge presented by the low level of stock on the market.”
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
You may also be interested in:
Common areas of concern when borrowing via a limited company for buy to let
Many landlords are now becoming more comfortable with buy to let borrowing via a limited company including the few additional hurdles this brings. However there is still a perception that the process is complicated and harder to get agreed but this is not always the case, as Gary McKenna, Consultant Mortgage Broker explains.
Will I be accepted for a Ltd Co buy to let mortgage?
Gary McKenna consultant mortgage broker explains what lenders are looking for when it comes to applications from limited companies.
Six common misconceptions about BTL mortgages for Ltd Co's
It would be impossible to cover every single piece of buy to let mortgage lending policy which sits around limited companies but what Jeni Browne wanted to do was put to bed some myths.