Housing activity is continuing to slow down, with sales expected to remain flat during the summer, according to surveyors.
The Royal Institution of Chartered Surveyors said that momentum is “continuing to ebb” in the UK housing market with sales dipping slightly in April.
The flat picture for sales at the national level is expected to continue over the next three months.
RICS said that a lack of choice, uncertainty due to the election and the ramifications of stamp duty changes as factors hampering activity in the housing market.
Despite the slowdown, house prices continue to rise nationally, with the pace of growth steady over the last five months, although there are regional variations.
Prices in London have been in negative territory for 13 months, while price growth has eased in East Anglia recently along with the North East.
At the other end of the scale, in the North West 67% of agents reported higher prices in April.
The twelve-month outlook is more optimistic with 31% of estate agents surveyed anticipating a pick-up in sales over the year ahead at the national level.
Simon Rubinsohn, RICS chief economist, said: “Although the picture clearly does vary across the country, 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 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.”
Mortgage approvals fell to a six-month low in March, a sign homebuyers are becoming increasingly cautious as they start to feel the squeeze on their finances following last year’s Brexit vote.
According to figures from the Bank of England, the total number of mortgages approved fell by over 2,000 to 122,918. This makes it the second month in a row mortgage approvals have fallen.
Figures from Nationwide show that house price growth fell 0.4% April, the first time house prices have fallen in consecutive months for nearly five years.
Andy Sommerville, director at Search Acumen, said: “With an upcoming general election, this climate of caution looks set to continue for the short term at least. While elections create uncertainty they also enable opportunity.
“Political parties fine tuning their manifestos need to consider the critical issue of housing supply this country is facing and demonstrate they have innovative policies to introduce both immediate and long term redress to the UK housing market.”
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