Snap election uncertainty and stamp duty changes led to a dip in London house sales, according to Rics .
Momentum continued to ebb in the capital’s housing market in April and near term sales expectations lost pace.
The results of its Residential Market Survey for April 2017 showed buyer interest remained flat.
Respondants cited a lack of choice; uncertainty due to the calling of an early election; and the ramifications of stamp duty changes as factors that hampered activity.
Agreed sales slipped with 12% more respondents noting a fall rather than rise in April, following a broad trend of slowing transactions in London.
Simon Aldous MRICS, from Savills in London said: “We have seen a significant reduction in transactions and activity across many of our London offices in April – perhaps the timing of Easter.”
The plateau is expected to persist over the next three months as 9% more respondents expect to see a fall in sales over the time period.
Respondents continue to report price falls in central London. In April 32% more respondents saw prices falling in the capital (compared to -49% March) meaning the indicator on prices in central London has been in negative territory for 13 months.
Expectations have moderated in virtually all areas of the UK when compared to the March survey.
However, the twelve-month outlook is more optimistic with 17% more respondents anticipating a pick-up in sales over the year ahead in London.
Tenant demand is said to have stabilised across the capital, ending a sequence of three consecutive quarters in which demand deteriorated.
Nevertheless, rents are expected to slip a little further in the near term, although the twelve-month outlook is more or less flat.
Rics chief economist Simon Rubinsohn said: “The bulk of the feedback we are receiving points to a fairly flat summer for both activity and prices. Lack of stock on the market remains a key challenge for the sector with recent and forthcoming tax changes having a material impact on transaction levels, particularly at higher price points.
“Uncertainty relating to the forthcoming general election is also highlighted by some respondents as a reason for inertia.
“It is noticeable in the April report that the amount of new rental instructions coming through to agents is continuing to edge lower which is not altogether surprising given the changing landscape for buy to let investors. One consequence of this is that rents are expected to continue rising not just in the near term but also further out and at a faster pace than house prices.”
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