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RICS respondents blame Brexit for falling activity

The February RICS residential market survey reports that 77 per cent of respondents believe that the Brexit issue is dampening sales activity.

The survey shows that new buyer enquiries, agreed sales, and new instructions all dropped together for the sixth month in a row.

Meanwhile, the headline price indicator, which came in at -22 per cent in January, fell to -28 per cent, which RICS says is the weakest momentum recorded since May 2011. It adds that Scotland and Northern Ireland are the only places in the UK with a positive reading for this metric.

The outlook for the next 12 months is slightly more upbeat, however, with 23 per cent of those asked believing that sales will return to growth within that time frame, except for London and the South East, with further decline expected in the capital while prices flatten in the surrounding region.

Concentrating on the lettings market, tenant demand crept up slightly, a positive move for the tenth month in a row, while new landlord instructions stayed in negative territory for the twenty-ninth consecutive month. Additionally, the number of respondents who see near-term rental growth increased from 16 per cent last month to 22 per cent in February.

RICS chief economist Simon Rubinsohn says: “Feedback… makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers.

“It is clear from professionals working in the market that this environment requires a greater degree of realism from those looking to move. A reluctance from some vendors to acknowledge the shift in the balance of power in the market will compound the difficulty in executing transactions.”

RICS head of policy (interim) Hew Edgar adds: “Taking Brexit out the equation, there are clear issues that need to be tackled such as supply; a disputable SDLT framework; and a faltering PRS system. All of which have been overshadowed and have therefore not received the much-needed parliamentary discussion and debate.

“UK parliamentarians must recognise that the prolonged uncertainty without effort to address separate key issues in the UK, is damaging confidence in the housing sector, and we share the resounding sentiment of frustration from our professionals.”

One77 Mortgages managing director Alastair McKee comments: “It is fair to say that these latest findings from the RICS are not quite in line with what we’re seeing on the ground at present.

“Despite the consistent setbacks with Brexit, buyer sentiment has remained strong so far this year and while politically the landscape looks set to remain a tricky one, I don’t think this will have the impact on the property market that many are predicting.”


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