Property price growth stalls in the UK
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Property prices stall in the UK
Residential property prices in the UK have grown at their slowest rate in more than four years, according to new data published by the Royal Institute of Chartered Surveyors (RICS).
The data shows that house price growth has all but come to a standstill nationally, with headline price growth falling from 7% in June to only 1% in July, the lowest level since early 2013. At the same time, house sales have lost momentum with the balance of new buyer enquiries and agreed sales remaining negative.
The new data from RICS come only days after the Halifax published its latest house price index showing that house prices fell in the three months to August, with prices down by 0.2% over the quarter.
Sales are being held back by a range of factors, according to analysts, with a shortage of homes for sale, Brexit and political uncertainty all being blamed. Just 28% of respondents to the survey said they were expecting house prices to rise in the next quarter, the lowest level since July of last year, in the wake of the vote to leave the European Union.
Stephen Wesserman, managing director of West One Loans, said; “Political and economic upheaval, alongside the ongoing supply versus demand issue, is continuing to plague the property market, damping buyer and investor demand.”
Simon Rubinsohn, RICS chief economist, commented: “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.”
Andy Sommerville, director of Search Acumen, urged the government to take steps to prevent the weaknesses in the housing market spreading or getting worse. He said; “The shadow over the housing market is leaving no corner untouched as the stagnation that has been affecting London and the South East markets begins to spread and bring the UK housing market even closer to a standstill. Urgent action is required to prevent the inertia spreading. Growth outlooks have been downgraded and consumer spending is at its worst level in four years. Without action to support increased market activity, the downward trajectory of property values will only rumble on.”
Slowing housing growth and the risk of house prices falling will be a source for worry for homeowners who find themselves in negative equity, or with very little equity in their property.
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