Post Brexit woes continued in July according to Rics’ latest research as surveyors reported declines in price, expectations, buyer enquiries, agreed sales and new instructions. The institution’s latest UK Residential Market Survey recorded a negative net balance of its members (-33%) saw price falls in the capital although the pace of decline had eased on June, immediately after the vote for Brexit.
Its study said for the second month running London was one of the only regions where prices were expected to fall over the rest of the year ahead.
Predictions for the future were somewhat rosier, however, with surveyors placing London among the areas most likely for house price growth in the medium term over the next five years.
Rics chief Economist Simon Rubinsohn said: “The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower the cost of mortgage finance.
“Against this backdrop, it is not altogether surprising that near-term activity measures remain relatively flat.
“However, the rebound in the key 12 month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.”
The survey also found interest from new buyers in London continued to wane with results showing falls in demand and expectations both now in their sixth consecutive month.
The report also showed a drop in the number of new instructions with housing supply at record lows in most parts of the UK.
Simon said: “Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with Rics data showing inventories on agents books around historic lows on average.
“This is a long running story that may have been exacerbated by recent events but clearly needs urgent action from the new government.”
In line with weaker demand and worsening supply, the volume of sales also fell for the fifth month in a row.
"Rics puts this down in part to the tax changes on investment properties that came into effect in March and on the ongoing fallout from the EU referendum decision.
Savills’ Simon Aldous saidcommented, “It is very hard to analyse the effect of the EU referendum on prime London markets.
"Without a doubt its impact more negative than positive, we have seen transaction levels fall quickly, but this may be short term.”
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