Housing demand fell for the first time in a year following the buy-to-let rush to beat the 1 April stamp duty deadline, according to surveyors. The Royal Institute of Chartered Surveyors said that last month 22% of surveyors reported a drop in demand from buyers. However, lack of supply will continue to push up UK […]
Housing demand fell for the first time in a year following the buy-to-let rush to beat the 1 April stamp duty deadline, according to surveyors.
The Royal Institute of Chartered Surveyors said that last month 22% of surveyors reported a drop in demand from buyers.
However, lack of supply will continue to push up UK house prices despite short-term uncertainty, RICS said.
Prices are forecast to rise across the whole of the UK over the next 12 months, although London has lower growth expectations with prices likely to remain flat.
Over the next five years, the outlook for prices remains positive in each part of the UK with expected growth of between 3% and 5.5% per annum.
RICS said that the fall in demand comes after buyers brought forward transactions to beat the introduction of the stamp duty charge. Buyers are also showing more caution in the face of the impending EU Referendum.
Despite the fall in demand, prices remained firm with 41% of surveyors reporting growth in April. Prices increased in most regions, with London and the North of England the only exceptions.
Simon Rubinsohn, RICS chief economist, said: “Uncertainty is a word that features heavily in the feedback we are receiving from members responding to the survey and is contributing to the flatter trend in the latest data. More ominous is the expectation that both prices and rents will head materially higher over medium term despite existing affordability concerns with the supply pipeline continuing to fall short of household growth notwithstanding the various levers the government is pulling to try and drive development.”
Andy Sommerville, Director of Search Acumen, said: “Whether or not a Brexit will unfold remains to be seen, but the uncertainty is definitely creating an environment of caution in the property sector, as seen in the drop in interest from buyers for the first time in over a year. Sellers are also lowering their asking prices in the short term as Brexit draws closer, which could offer some buyers temporary relief.
“There is no clear evidence of the market’s direction following the vote. The Chancellor, in a bid to support Brexit has suggested that property prices could plummet if Leave gets the majority vote. Foreign investors may pull out, and London in particular could be worse off. However, others speculate that shrewd investors confident of a ‘stay’ vote could be preparing to snap up property closer to the vote as prices dip slightly.”
