The UK property market is at its weakest for six years, with costs flat or falling throughout half the nation in line with Britain’s official surveyors physique, with experiences that gross sales are “in limbo” till a Brexit deal emerges.
The Royal Establishment of Chartered Surveyors (Rics) mentioned its month-to-month survey of members discovered “the weakest studying since September 2012” in October, with costs falling in London, the south-east, south-west and East Anglia.
Surveyors anticipate costs to proceed to fall in these components of the nation for the subsequent three months, though they’re forecasting they may stay flat nationally over the subsequent 12 months.
Many surveyors mentioned transaction exercise has nearly evaporated, as consumers refuse to strike a deal till there’s some form of certainty over Brexit. In Ealing, west London, surveyor Ronan McNamara of Robertson Smith and Kempson mentioned: “Brexit is the large problem. It has massively affected purchaser confidence.”
Exterior of London, the affect of Brexit on carmakers in Birmingham can also be contributing to falling markets. Alex Smith, a surveyor in Birmingham mentioned “Uncertainty in JLR [Jaguar Land Rover] and different related motor trades” was damaging market confidence.
Simon Rubinsohn, chief economist at Rics, mentioned: “The uncertainty in regards to the financial outlook on the again of the unending Brexit negotiations seems a key drag on sentiment.”
The Rics findings got here simply hours after Halifax, Britain’s greatest mortgage lender, mentioned annual home worth progress has fallen to 1.5%, its lowest price in additional than 5 years. On 1 / 4 on quarter foundation, costs have crawled to a digital halt, rising simply 0.2%.
A separate report from upmarket financial institution Coutts mentioned prime central London is “in limbo” whereas the Brexit negotiations proceed. It mentioned costs have been down 14.7% from their peak in 2014, and transaction exercise had fallen by a few third.
Nonetheless, some components of the UK are nonetheless experiencing brisk exercise. Regardless of the Irish border remaining the thorniest problem round Brexit, the Norths’s property market is booming. “The strongest progress [is] as soon as once more coming in Northern Eire and Scotland,” Rics mentioned.
In Belfast, surveyor Kirby O’Connor of GOC property brokers mentioned: “The gross sales market has been sturdy particularly over the previous month, we’ve seen a powerful urge for food for funding.”
In Hexham, Northumberland, Neil Foster of Foster Maddison mentioned: “Gross sales have remained constant all through October with little or no affect from day by day hysteria within the media over Brexit.”
There was unhealthy information for tenants, with Rics reporting that rents have begun to rise regardless of the slowdown within the residential gross sales market. It mentioned there had been a “modest enchancment in tenant demand throughout the three months to October”, as landlords have been promoting as much as keep away from new buy-to-let taxation. However whereas demand is rising and provide is falling, Rics predicts solely small rises in rents.
In line with separate information from Reapit, which manages software program for letting and property brokers, rental demand has risen 13.3% prior to now yr whereas rental inventory was down 6.9%.
“Over one in 10 landlords are actively trying to promote, compounding the problem,” mentioned Gary Barker of Reapit. “Though our analysis exhibits that rents have stayed broadly flat over the previous yr, inevitably we face a unbroken supply-side squeeze, which is able to result in larger rents within the close to future. There are merely not sufficient properties to satisfy demand, and tenants face rising prices in a turbulent economic system.”
The housing market was boosted by the help-to-buy scheme introduced by George Osborne in 2013.
Whereas Brexit dominates the gross sales market, property consultants mentioned different components, resembling stamp responsibility and rate of interest rises, are additionally dampening market exercise, notably amongst higher-priced properties.
“For properties marketed at over £1m, shut to a few quarters of respondents reported gross sales costs have been coming in beneath asking costs,” Rics mentioned. “What’s extra, 14% cited gross sales costs have been on common greater than 10% beneath the preliminary asking worth [up from 10% three months ago].”