Uncertainty about Brexit has caused the property market to stagnate, with the number of properties for sale falling, demand from new buyers weakening, and sales taking a record amount of time to complete, according to the Royal Institute of Chartered Surveyors.
The September 2018 RICS UK Residential Market Survey found prices remain flat nationally and that 12-month sales predictions had turned negative.
Sales stock on estate agents’ books is now close to record low levels and the time taken to complete a sale has increased to approximately 19 weeks, the longest duration since RICS started collecting data in February 2017. The volume of fresh listings continued to fall in both the sales and lettings markets, with limited choice likely to be hampering demand.
RICS chief economist Simon Rubinsohn says: “There are a number of themes running through the comments of respondents this month but uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet. All of this is not surprisingly taking its toll on the sales market with the key activity indicator in the survey flat or slightly negative in all parts of the country apart from Northern Ireland and Wales.”
As well as Brexit, respondents to the survey cited the mixture of affordability constraints, a lack of stock, economic uncertainty and interest rate rises to be holding back activity.
House prices remained more or less unchanged at the national level in September, as the headline price net balance inched down to -2 per cent, compared with a reading of +1 per cent in August.
Former RICS residential chairman and north London estate agent Jeremy Leaf says: “We have not seen the ‘autumn bounce-back’ in the market that we were expecting, especially after such a quiet summer. It is interesting that activity remains fairly flat nationally, which means London is still in negative territory, turning the old north/south property divide on its head.
“It is particularly disappointing that sellers seem reluctant to make their properties available in sufficient numbers, which would have improved choice and get the market moving in the period running up to Christmas. Our customers are still telling us that Brexit uncertainty is a factor in what has become a needs-driven market.”
Kensington Mortgages new business director Craig McKinlay says: “As these findings show, the UK housing market is suffering from a bottleneck effect. When we look at the big picture, a lack of supply coming onto market is slowing down the housing chain – discouraging homeowners from downsizing and in turn, preventing suitable properties being freed up for first time buyers or second steppers.”