The outlook for UK house prices among property professionals is at its gloomiest in ten years, a survey revealed today.
The difference between the number of estate agents and property surveyors anticipating increases and those expecting decreases dropped to -22 per cent last month.
The January reading of the Royal Institution of Chartered Surveyors house prices balance is the lowest since March 2009.
Sluggish: Levels of sales, new instructions and enquiries all fell in January
Levels of home sales, new instructions and enquiries all fell in January and there is ‘little prospect’ of a turnaround in the near future, according to Rics.
London and the South East of England are being hit hardest by the apparent slowdown, while nationally, the market is being hampered by ‘hesitancy’ over Brexit and, in certain areas, ‘affordability constraints.’
New buyer enquiries dropped for the sixth successive month in January, while demand slipped across almost all parts of the country. The number of new properties coming up for sale fell to its lowest level since July 2016.
Agreed sales also took a dip, with the rate of decline gaining pace compared to the previous month.
Simon Rubinsohn, chief economist at the Rics, said: ‘Although some contributors to the survey have taken comfort from a better start to the year than anticipated, a larger proportion are continuing to find the market a difficult one in which to do business.
Ups and downs: National house prices in the last three months, shown since 1995
‘Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market, although whether that will be sufficient in London and parts of the south east where affordability remains stretched and the tax changes are most penal remains to be seen.’
Earlier this week, the Office for National Statistics and the Land Registry reported that annual house price growth was at its weakest level in over five years in December.
Dwindling: New buyer enquiries dropped for the sixth successive month in January
The Rics house prices balance, which measures the difference between the number of estate agents and property surveyors anticipating increases and those expecting decreases, dropped to -22 per cent last month, which is the lowest level since March 2009.
In London, the South East of England, East Anglia and the South West of England, strong house price growth over the last six years has left ‘affordability looking stretched’, which in turn is hampering demand.
The Rics said its agreed sales balance, which is a measure of the anticipated volume of transactions, worsened to -25, which is the lowest since October 2017.
Meanwhile, the sales expectations balance for the next three months stands at its lowest since the survey began in 1999, falling to -32 per cent from -28 per cent.
The Rics prices balance has been negative or flat since July 2017, while sales expectations have been in negative territory since August last year.
The flow of properties coming on to the market fell in January, with the balance of -25 per cent, which is the lowest since July 2016.
The average time it takes to sell a property is also creeping up. From listing to completion it now takes 19.4 weeks to sell a home. This is the longest period of time recorded since the data was first compiled in 2017.
Interest levels: National enquiry levels in the property market since the year 2000
Lengthy process: It now takes 19.4 weeks to complete the sale of a home, the Rics said
In the lettings market, tenant demand picked up last month, but the supply of new rental properties being listed by landlords continued to fall, spelling further rent rises on the horizon for tenants.
Surveyors expect rents to rise by around 2 per cent over the next year and by around 3 per cent each year over the next five years.
Mark Zorab of Elstons estate agents in Chepstow, who took part in the Rics survey, said: ‘Fifty per cent of [the] general public [is] waiting to see what the Brexit outcome is. The other 50% is keen to buy but only at the right price.’
Chris Clubley, of estate agency Clubleys in York, said: ‘There is a lot of uncertainty due to Brexit, the sooner a deal has been reached the better, so everyone can move and get on with their lives.’
Prospects: Property price expectations for the next quarter and 12 month periods