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‘Political uncertainty’ blamed for slowdown in UK property market – The Guardian

The property market has ground to a halt, with activity back to 2011 levels in some parts of the UK, according to the official surveyors’ body, which blamed “political uncertainty” and forecast flat prices and rents for at least the next year.

A large majority of surveyors in both London and south-east England are reporting falling prices, though the national picture is balanced by price rises in the West Midlands, the south-west and Northern Ireland.

The Royal Institution of Chartered Surveyors ( Rics) said: “Record low stock numbers, political uncertainty and the aftermath of tax changes are obstacles hindering the UK housing market, with price growth and sales activity subdued during the month of July.”

Its poll of valuers around the UK found “the softest reading since early 2013”, while south-east England posted “the weakest reading for this part of the country since 2011”.

Homes over £1m are having the most difficulty finding buyers, with many sellers having to accept price cuts. “At a national level, 68% of contributors identified homes valued over £1m as experiencing the greatest deviation when agreeing final prices.”

Mark Everett of the Michael Everett estate agency in Epsom told the survey: “The market is desperately price-sensitive and too much stock is unrealistically overpriced.”

In Ipswich, David Knights of David Brown & Co said: “The election result and all the talk of Brexit has had a profound effect on the market, and with high stamp duty charges, sales as well as new instructions are now suffering. Add to this the holiday season and the market is not very clever.”

In East Grinsted, Phillip Hiatt of Your Move said: “Vendors of older stock [are] having to look at price reductions to achieve a sale.”

In London, surveyors blame stamp duty, changes in tax on buy-to-let properties and Brexit for a sharp slowdown in the market. Stamp duty on a £1m home in London – not uncommon in many parts of the capital – now costs a buyer £43,750, prompting campaigners to call for cuts to the tax.

“[George] Osborne’s hike in stamp duty has had a negative effect. Removing interest relief for landlords is causing some to sell, [with] few sales now to investors,” said Allen Fuller estate agents in Putney.

Rents are also falling in the capital. Simon Aldous of Savills said: “Rents continue to fall slowly. We have seen seven consecutive quarters of marginal falls in rents.”

But in other parts of the UK, valuers are reporting buoyant activity. In Liverpool, Derek Coates of Venmore described July as “a strangely busy month considering external factors and the time of year. The investor market has been extremely busy, particularly from out-of-town investors.”

The net balance of surveyors reporting price rises fell from +7% to +1% in July, signalling that prices were broadly flat across the country. In London, the net balance reporting price rises was strongly negative, at -48%.

Surveyors were also asked by Rics to give their forecast on house prices. “Near-term price expectations continue to signal a flat trend over the coming three months at the headline level. Over the next 12 months, respondents remain more optimistic, with a net balance of +28% anticipating an increase in prices, albeit this was the least positive reading since last July, at the time of the EU referendum results. Again, central London continues to exhibit the most cautious 12-month projections relative to all other parts of the UK.”

Rics said it expected rents to rise no more than 2% nationally over the next year. “Although tenant demand continued to edge higher, it did so at the slowest quarterly pace going back nearly 20 years. Meanwhile, landlord instructions continued to fall, with 8% of respondents reporting a decline instead of an increase in listings.

“The sustained lack of supply means rents are expected to grow, albeit only modestly in the coming three months.”

‘Political uncertainty’ blamed for slowdown in UK property market – The Guardian

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