The Royal Institution of Chartered Surveyors (Rics) said that in March demand from buyers fell for the 12th month in a row, new instructions from sellers declined for the seventh consecutive month, and prices were flat nationally.
Rics measures confidence in the property market by balancing surveyors seeing price rises against those seeing price falls. It said the figures were the lowest since 2013. The latest Rics survey is in sharp contrast to figures earlier this week from Halifax which revealed a spike in prices.
“At the national level the price balance remained unchanged coming in at zero, representing the joint lowest reading since February 2013,” said the Rics survey.
The downshift is deepest in London and the south-east of England, said Rics, but prices were still rising in parts of the Midlands and north.
“London exhibits the weakest feedback, with a net balance of -47% of respondents citing further price declines. Respondents in the south-east, East Anglia and north-east, also reported prices to be falling but to a lesser extent than in the capital. Meanwhile, prices continue to drift higher across all other parts of the UK, with Northern Ireland, Wales and the East Midlands seeing the strongest readings.”
Surveyors in the south said Brexit and stamp duty were behind the fall in prices. “Stamp duty and Brexit have killed the fluidity of the London market. Only when the extent of the resulting economic damage is properly understood will things be able to change for the better,” said Toby Whittome, of Jackson Stops, in London.
Rics said the reversal in the property market could prompt the Bank of England to delay the next rise in interest rates.
Simon Rubinsohn, Rics’ chief economist, said: “The latest Rics results provide little encouragement that the drop in housing market activity is likely to be reversed any time soon. It has the potential to impact the wider economy contributing to a softer trend in household spending.
“This could make Bank of England deliberations around a May hike in interest rates, which is pretty much odds-on at the moment, a little more finely balanced than would otherwise be the case.”
Predictions that rents would rise following the introduction of greater taxation on buy-to-lets have yet to materialise, with tenant demand weak in many parts of the country.
In Guildford, Surrey, Tony Jamieson, of the estate agents Clarke Gammon, said: “There has been an increase in properties available for rent and no increase in tenant demand, so rent values are falling, and we expect this trend to continue.”
But in Woverhampton, Andrew Pearce, of Millennium Properties, said: “Demand is at an all-time high but supply is dwindling with tax changes, stamp duty and soon agents being unable to charge for essential reference searches. A crucial sector of the housing market is being badly led – to the detriment of landlords and tenants.”
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