Post-referendum housing market remains ‘resilient’ say surveyors

Surveyors expect confidence to return to the UK's housing market in the coming months after a "wobble" in price growth caused by June's referendum over EU membership.

British Houses
A survey of members by the Royal Institution of Chartered Surveyors (RICS) published on Thursday showed that house price growth was at its weakest in three years in July but was still proving "more resilient than might have been expected".Although a net balance of 34 per cent of surveyors across the UK reported a decline in sales in July – roughly the same as in June and representing the biggest decline in sales since 2008 – a balance of five per cent reported prices rising rather than falling. The survey said that comments from members "suggest activity has picked up after an initial wobble, while others cite the Brexit vote as having only a modest or even negligible impact thus far" with a majority of surveyors expecting prices to increase further in the next 12 months.Simon Rubinsohn, chief economist at RICS, said, "The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower cost of mortgage finance. Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat. However, the rebound in the key twelve month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.""Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with RICS data showing inventories on agents books around historic lows on average. This is a long-running story that may have been exacerbated by recent events but clearly needs urgent action from the new government."

The report said that the shortage of properties on the market "continues to cause ripples" with new instructions falling again in July.  A third more respondents reported a fall in new instructions with supply bumping along at, or close to, record lows in most parts of the UK."In line with the dip in demand and the worsening supply position, sales declined sharply. Across the UK, 34 per cent more respondents reported a fall in transactions, with the monthly pace of decline in both July and June at the fastest since 2008," said the report. "This reflects a continuation of a trend that started back in April following the implementation of the tax surcharge on investment purchases. Anecdotal reports provided by contributors to the survey suggest both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market.""However, looking into the comments left by members suggests conditions vary markedly between agents. A large portion of respondents note, after an initial wobble, activity has returned to normal, while others feel Brexit has only had a very modest or negligible impact."The survey showed that London continued to be the area with the most negative reading for current house prices, with a balance of 33 per cent of surveyors in the capital reporting prices falling rather than rising.