Housing market activity got off to a subdued start in 2018, say surveyors

The housing market is seeing contrasting trends - with sellers of top-end homes particularly struggling to achieve asking prices while in many places conditions are "solid but unspectacular", according to surveyors.

In general, housing market activity got off to a subdued start in 2018, as new buyer inquiries fell in January for the 10th month in a row, the Royal Institution of Chartered Surveyors (Rics) said.

Sales levels and the flow of fresh properties coming on to the market also drifted lower.

The average number of properties on estate agents' books continued to slip back towards the record low levels seen around the middle of last year.

The more expensive tiers of the housing market continue to experience tougher conditions, the report said.

Two-thirds (67%) of surveyors noted sales prices coming in below asking prices for properties marketed at £1 million-plus.

For properties listed between £1 million and £500,000, 56% said sales prices were coming in below asking prices.

For properties marketed at up to £500,000, the majority (58%) noted sales prices were coming in at the same level as asking prices or slightly above, while 42% said they were below.

While sales levels are generally expected to remain flat over the coming few months, they are expected to have picked up by the coming 12 months, Rics found.

A net balance of 8% of surveyors saw prices increase rather than fall month-on-month - suggesting modest price growth, the report said.

House prices continued to fall in London, and, to a lesser extent, also in the South East of England, East Anglia and the North East of England.

At the other end of the spectrum, the North West of England, Northern Ireland and Wales saw the strongest price growth. House prices were also rising in Scotland in January and they are predicted to continue to do so over the near term, but at a slower pace.

Looking 12 months ahead, house prices are expected to head upwards across the UK apart from in London.

Simon Rubinsohn, Rics chief economist, said a lack of properties on the books continues to provide a "major challenge with the number of valuations being undertaken not suggestive of a pick-up in new supply anytime soon".

He said: "Divergent regional trends remain very much to the fore with the market in many parts of the country still actually behaving in a solid if unspectacular way."

Mr Rubinsohn said affordability issues continue to play a key role - with those areas where house price earnings are most stretched seeing the softest markets.