The latest residential market survey from RICS has indicated a continued decline in supply and transactions in the housing market, mainly due to ‘domestic political uncertainty’.
The June 2017 study of surveyors showed that the current state of the economy was hitting the market, with net balances for new buyer enquiries, new instructions and agreed sales in decline.
The survey found that the average supply of property has ‘slipped to a new low.’
Expectations for the next 12 months predicted sales activity to slip to its lowest level since the immediate aftermath of the Brexit referendum.
Respondents pointed the finger at domestic political uncertainty as the biggest contributor to the drop, with 44 per cent naming this as the cause, compared to 27 per cent who said Brexit was the most influential factor.
In London, where prices in the most expensive areas fell by 5.3 per cent, the political climate, Brexit and the changes in Stamp Duty were all equally named as contributors to the decline.
Of the survey results, Mortgage Advice Bureau head of lending Brian Murphy says: “The report issued by the RICS today is sentiment based, rather than reporting on hard data, although this does provide us with how surveyors are currently viewing the market and their expectations both in the shorter and longer term.
“Whilst some of the terminology in the report would appear at first glance perhaps a little negative, the reality is that, in many areas, the report states that house price growth remains in positive territory, albeit perhaps at more subdued levels than previously. But that’s not the same as house prices dropping in real terms – price growth is still price growth, however you look at it.
“Of course, the ongoing lack of supply seen in some areas is going to impact on the amount of transactions, as less stock available equates to less choice for buyers in practical terms, who may now just take a little longer to find what they are looking for. But that very dynamic is what’s likely to keep prices at a steady momentum for the foreseeable future. And let’s face it; a market which remains at its current equilibrium is a far more healthy environment than another house price bubble or market price correction, neither of which would be welcomed by many.”