Surveyors believe that uncertainty following this month's referendum on Britain's membership of the European Union will lead to a short-term drop in UK house prices.
The latest survey from the Royal Institution of Chartered Surveyors (RICS), shows a net of 10 per cent of the nation's surveyors who believe prices over the coming three months are more likely to fall than rise. It represents the first time since 2012 that more surveyors expect prices to drop than those expecting an increase.
However, the RICS report said that any price fall was unlikely to mark the start of an era of more affordable housing, suggesting that, in the longer term, prices would resume their upwards path, primarily as a result of the shortage of supply.
Simon Rubinsohn, chief economist at RICS, said, “Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market. Instead, it appears to me that what we are looking at is a short-term drop caused by the uncertainty resulting from the forthcoming EU referendum coupled with a slowdown following the rush to get into the market ahead of the tax change (in April) on the purchase of investment properties.”
According to the RICS survey, house prices are thought likely to regain momentum and rise by an annual rate of 4.1 per cent for the next five years.
Peter Sherrard, managing director of PropertyPriceAdvice.co.uk, said, "Uncertainty ahead of the EU vote coupled with a general slowdown in demand is now clearly having a chilling effect on the housing market as buyers are aware of the chance of a deal with some sellers acquiescing to the pressure.
"Added to this many people will clearly wait until after the referendum before buying or selling, which all leads to a lot of uncertainty. However, the market will continue after June 23 and supply and demand coupled with the ease of accessing funds will prevail.
"Increasing affordability issues and the stamp duty increase for buy-to-let landlords and second home buyers have also curbed housing demand which have resulted in a slowdown in the housing market, but this will be short-term.
"Looking longer term now, low interest rates, falling unemployment and rising real earnings will continue to support demand for property, and yet housebuilders are unlikely to build anywhere near the level of housing required. This cocktail of high demand and low supply will cause house prices to rise at a steady pace."
A net balance of 54 per cent of surveyors said they expected prices to be higher in 12 months' time. In addition to house price increases, they also expect rents to increase at an annual rate of 4.7 per cent over the next five years.
The survey found that, last month, demand from buyers fell back for the second month in a row while the number of properties coming on to the market also decreased sharply.
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