Housing market outlook worst for 20 years as Brexit black cloud looms

Sales are expected to slump in the months leading up to Brexit, according to surveyors.

The Royal Institution of Chartered Surveyors (RICS) says that 28% of surveyors expect sales to be either flat or negative across all parts of the UK over the next three months. It is the most pessimistic reading since records began in 1999.

Many surveyors who responded blamed Brexit uncertainty for the slump in the market.

However, they are more upbeat about the next 12 months, suggesting that some of the near-term pessimism is linked to the lack of clarity around the departure the UK will make from the European Union.

National price expectations - three and 12 months

A graph showing national house price price expectations - three and 12 months

 

Weakening demand is also dragging down property prices.

An increasing number of surveyors are also reporting house price falls rather than rises in December – making it the fourth month in a row that readings have been negative.

RICS says that its house price balance, which assesses whether property prices have risen or fallen, fell from -11% in November to -19% in December – the weakest since 2012.

However, the UK-wide measure masks regional differences.

Prices falls were most acute in London and the South East, while respondents in East Anglia, the South West and the North East also report negative trends.

All other areas continue to see prices rise, led by solid growth in Northern Ireland, the North West of England, as well as Scotland.

The 12-month outlook for prices remains broadly flat. With the exception of London and the South East, prices are expected to rise or hold steady across other UK regions over 2019.

Surveyors say that a lack of supply and affordability continue to affect the market alongside uncertainty, with stock levels and buyer interest declining further in December.

New buyer enquiries fell for a fifth month in a row, while the number of new properties coming on to the market has been in negative territory for the past six months.

Simon Rubinsohn, RICS chief economist, says: “It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued.

“This is also very clearly reflected in a worsening trend in near-term sales expectations. Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts, but that moment feels a way off for many respondents to the survey.”

This article was originally written by our sister publication Moneywise.

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