Brexit Paralysis: housing market outlook worst for 20 years

The Royal Institution of Chartered Surveyors says the housing market outlook over the next three months is the worst for 20 years.

A net balance of 28 per cent of RICS members expect sales to fall in the next three months.

This is the worst prediction since RICS records started in October 1998 and the blame is put on Brexit.

Sales expectations for the next three months are now either flat, with no change predicted, or negative, indicating falling sales, across all parts of the UK, the latest study claims.

Meanwhile the latest government house price figures on past transactions also show the market continues to slow as the Brexit stand-off goes on and on.

Prices remained relatively flat in the year to November, according to official figures, with prices rising 2.8 per cent compared to 2.7 per cent in the year to October.

The average UK property price is now £230,630.

Seasonally adjusted, prices rose a meagre 0.1 per cent between October and November according to the latest Land Registry and Office for National Statistics data.

In response Nick Leeming, chairman of Jackson-Stops, says: “Despite many regions across the UK experiencing annual house price growth, with the West Midlands continuing to be the star of the show, more than half saw prices fall on the month in the lead up to the Christmas period. Over the last year there has generally been a mismatch between vendor expectations and the price that buyers are prepared to pay, particularly at the top end of the market. It will be interesting to see if these price dips have any impact on transaction levels.”

Meanwhile Jeremy Leaf, north London estate agent and a former RICS residential chairman, adds: “They confirm that price falls in London are masking some resilience elsewhere in the UK and that transaction numbers are holding up reasonably well. However, they don’t reflect the recent Brexit uncertainty.

“On the ground, we are finding that we are in a price-sensitive, needs-driven market, especially at this time of year, which continues to be underpinned by low mortgage and unemployment rates, improving affordability and stock shortages. As a result, we recorded better-than-expected viewings and valuations in early January, despite the Brexit uncertainty.”

And Kevin Roberts - director of Legal & General Mortgage Club - adds: “The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the property market. But a combination of low interest rates and the slowing house price growth we are seeing today should act as a catalyst to encouraging buyers to take action.”

Pessimistically the stagnation could continue for some time according to Shaun Church, director at Private Finance: “As we continue to approach March 29 with no clearer picture as to how the UK might look outside of the EU, property prices are continuing to take a hit, with many prospective buyers and sellers at risk of following politicians’ lead by becoming paralysed by uncertainty.

“The impact of Brexit on the UK property market is likely to rumble on far past the date of the UK’s official departure, as we wait to see what the true effect of the UK’s exit means for property values and the wider economy. But while current homeowners may be stuck in a holding pattern for now, this flat market marks a time of great opportunity for first time buyers.”