- Reuters/Stefan Wermuth
LONDON – The UK housing market continued to stall in September, according to the Royal Institute of Chartered Surveyors.
The group’s monthly UK Residential Market Survey found surveyors reporting a decline in both sales and new buyer enquiries over the month, meaning sentiment is now flatter than at any point since the EU referendum result last June.
In September, 20% more respondents reported a fall rather than rise in demand from would-be buyers, making it the sixth consecutive month of negative readings.
Additionally, 15% more respondents reported a fall in agreed sales rather than a rise, which is the lowest reading since July 2015.
The immediate future doesn’t look much brighter. Over the next 3 months, surveyors’ expectation of national sales activity slid to -1% from +7% in August.
The survey also highlighted a big – and growing – regional disparity in housing market activity. London and the surrounding south-east England were at the forefront of the decline in sales, while only Wales and south-west England were reported to have seen an increase in sales, with the rest of the UK flat.
While prices were also steady on the national level, London remained firmly negative, while the price balance in the south-east was also negative for a fourth consecutive month. Both of these regions contained the highest proportion of respondents who perceive the market to be overpriced compared to the rest of the UK.
RICS chief economist Simon Rubinsohn said the survey highlighted stark regional differences in the national housing market and suggested weak sentiment could be related to uncertainty surrounding a possible Bank of England interest rate hike.
“It was always questionable to talk about the housing market as a single entity but the stark divergence in key readings from the latest RICS survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time,” he said.
“In part, this is a reflection of affordability constraints hitting the higher priced segments of the market. It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over ten years.
“That said, we are continuing to see evidence of shortage of stock both in the new build and second hand market. And despite the announcements at the recent Conservative Party conference, it is hard to envisage this changing any time soon. Against such a backdrop, prices in general are likely to remain elevated and indeed, as the survey indicates, continues to rise over the medium term in most parts of the country.”