Prolonged Brexit uncertainty holding back housing market, surveyors warn
Prolonged Brexit uncertainty is damaging confidence in the housing market and overshadowing other pressing issues, as the number of properties for sale sits at record low levels, surveyors have warned.
A net balance of 28% of surveyors reported house prices falling rather than rising in February, showing the weakest price momentum since May 2011, according to the Royal Institution of Chartered Surveyors (Rics).
Scotland and Northern Ireland are now the only parts of the UK seeing prices rise, while particularly negative price feedback has been seen in London and the South East of England, as well as in East Anglia and the South West of England.
Elsewhere, prices are on a flat trend with no change, surveyors said.
More than three-quarters (77%) of those surveyed said Brexit uncertainty is the biggest challenge facing the housing market right now.
Furthermore, 71% felt this was affecting both buyers and sellers.
Meanwhile, average stock levels are now back to record lows, and property professionals said this is the second biggest challenge, after Brexit.
Just under 42 properties are now available per estate agency branch on average – a record low for this part of the survey, which started in April 1994.
The number of new properties being listed for sale has been dwindling for eight months in a row, Rics said.
Meanwhile, the average time taken to sell a property from listing to completion, was unchanged in February at just under 19-and-a-half weeks – the joint longest average since the question was introduced to the survey two years ago.
Hew Edgar, Rics head of policy (interim), said it was clear from the survey that the “wearisome state of British politics that has arisen from Brexit” is taking its toll on housing.
He said housing issues, such as a lack of supply, have been “overshadowed”.
Mr Edgar continued: “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.”
The survey also found demand from home buyers fell for the seventh month in a row in February.
The number of agreed house sales was also on a downward path, having displayed a flat or negative trend since March 2016.
Rics said this near-term uncertainty is expected to linger for the next three months, with surveyors being more upbeat in their sales expectations for 12 months’ time.
Simon Rubinsohn, Rics chief economist, said: “Although activity in the housing market continues to be weighted down by the lack of available stock, changes in the tax regime affecting property, and affordability – feedback to the latest Rics survey makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers.
“And with little sign that the issue will be resolved anytime soon, it could prove to be a challenging spring for the housing market and the wider economy.
“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.”