House prices slowed further in June, driven by increased political uncertainty and Brexit, according to surveyors.
The Royal Institution of Chartered Surveyors said that there was “little encouragement” for activity in the UK housing market with agreed sales declining alongside new buyer enquiries and new instructions.
The percentage of surveyors reporting a rise in house prices fell from 17% in May to 7% in June – the lowest reading since July 2016.
Medium-term sales expectations have also slipped to the lowest level since the immediate aftermath of the referendum.
RICS said that at a national level 44% of respondents identified domestic political uncertainty as the biggest factor explaining the current state of the market, while 27% cited Brexit.
However, in London, the political climate, Brexit and the changes in stamp duty were all equally cited as contributing to the “lethargy”.
In Central London the pace of decline in house price inflation continues, with 45% of respondents reporting a fall in prices, while the South East and East Anglia are showing a flatter trend.
However, the downward trend is not wholly reflected across the country.
In Northern Ireland, 41% more surveyors saw a rise in prices rather than a fall in June, while in Wales this figure is 38%.
Prices continue to rise in the West Midlands and the North West, with reported net balances of up 33% and 28%, respectively.
RICS said the average stock on surveyors’ books had also hit a new low, highlighting the ongoing supply shortage
New instructions fell for the sixteenth month in a row, with 19% more respondents seeing a fall rather than rise in property coming on to the market.
Simon Rubinsohn, RICS chief economist, said: “The latest results demonstrate the danger, however tempting, of talking about a single housing market across the country. RICS indicators particularly regarding the price trend are pointing towards an increasingly divergent picture. High end prime properties may be seeing prices slipping back but, for good or ill, prices are continuing to move higher in many other segments of the market. Indeed, the disaggregated data suggests that this will continue to be the case over the coming months.
“Perhaps not surprisingly in the current environment, the term ‘uncertainty’ is featuring more heavily in the feedback we are receiving from professionals working in the sector. This seems to be exerting itself on transaction levels which are flatlining and may continue to do so for a while particularly given ongoing challenge presented by the low level of stock on the market.”
Brian Murphy, head of lending for Mortgage Advice Bureau, said: “For anyone who was waiting for a ‘market hits the rocks’ set of data in May, it’s clear from the data that, to the contrary, the UK housing market is holding its own and is resilient to the political and economic climate.
“Of course, the underlying factors of lack of stock and ongoing buyer demand outstripping supply in many areas does assist in terms of underpinning current values, but it’s against that very backdrop that, with volumes of purchases maintaining current momentum, we can see the market ticking along pretty positively.”
According to the latest Halifax House Price Index, annual house price growth eased to 2.6% in June, down from 3.3% in May – the lowest rate since May 2013.
On a monthly basis, house prices dipped 1% – taking the average price of a property to £218,390.
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