House prices in central London during August fell at their sharpest rate since 2008, despite increases in other regions of the UK, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS).More than half the surveyors questioned in the capital reported declines over the month and it was the only region in the country where prices were predicted to fall over the next 12 months.And while sentiment among a small majority of surveyors elsewhere in SE England, in East Anglia and NE England was also downbeat about prices, a majority of respondents in many other parts of the UK - led by Northern Ireland, NW and SW England, and Scotland - reported solid price growth last month.

Property shortages

The shortage of properties on the market continued to be a feature across the country. Surveyors said that a falling number of new homes coming up for sale meant average stock levels on estate agents' books remained near an all-time low.Simon Rubinsohn, chief economist at RICS, said, "The latest results continue to suggest that the greatest pressure on both prices and activity continues to be felt in the prime central London market."Although there are some signs that the wider South East is also losing some momentum, anecdotal evidence suggests the impact is very location specific. Meanwhile, the numbers for most other parts of the country point to a rather more resilient marketplace."The expectation nationally is that prices will remain subdued over the coming three months. Surveyors said buyer inquiries and transaction levels remain broadly flat, and the survey shows a slight fall in new instructions.  

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Related news:

• Renting now cheaper than buying in most UK cities
• Central England 'defying property price slowdown'
• Halifax finds ‘some buoyancy’ returning to property market

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UK policy changes driving landlords from the rental market

A main driver of the market in the coming months is expected to come from landlords, with some 61 per cent of respondents in the survey believing more landlords will exit the market over the coming year.Paul Bagust, RICS global property standards director, said, “The number of landlords exiting the market due to recent policy changes is concerning, especially given house price rises. A functioning private rented sector is crucial to a healthy housing market.” Surveyors said they expected a supply and demand mismatch to continue to drive prices, with rental growth expected to outpace house price growth over the next five years.  Brian Murphy, head of lending at the Mortgage Advice Bureau, said, “The report is sentiment based rather than reporting on hard data, which provides us with a good view from the engine room of how surveyors perceive the market. “It’s interesting to note that significant numbers of landlords are expected to exit the market. If this happens it could be change in dynamic required to get more homeowners moving.”For related news and features, visit our Residential Property section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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