UK housing market at its weakest since immediately after Brexit result, say chartered surveyors

The RICS headline price balance fell to +7 per cent in the month, down from +17 per cent previously

(PA)

The housing market weakened again in June due to a step-up in political uncertainty, according to the latest survey of UK chartered surveyors.

The Royal Institution of Chartered Surveyor’s (RICS) headline price balance fell to +7 per cent in the month down from +17 per cent in May and the weakest reading since immediately after the Brexit vote in 2016.

RICS said that, at a national level, 44 per cent of surveyors questioned identified domestic political uncertainty as the biggest factor explaining the current state of the market, while 27 per cent highlighted Brexit as the most important factor.

“Perhaps not surprisingly in the current environment, the term ‘uncertainty’ is featuring more heavily in the feedback we are receiving from professionals working in the sector,” said Simon Rubinsohn, chief executive of RICS.

On 8 June, Theresa May failed to secure a landslide electoral victory in the general election.

However, RICS also reported a stark regional divergence with a weak housing market picture in London and the South, but relatively strong sentiment from surveyors in the West Midlands, Wales and the North West.

Other UK housing market metrics have also been giving divergent signals recently.

Weakest since Brexit vote

According to the house price index from the Halifax, average UK house prices fell 1 per cent in June, after stagnating since the beginning of 2017.

But, the Nationwide index has shown a stronger picture, with a 1.1 per cent rise recorded in the month, reversing the previous three months of declines.

And the latest Office for National Statistics report on house prices also showed a strengthening, with price growth of 5.6 per cent in the year to April, up from 4.5 per cent previously.

Regional divergence

RICS (PA)

Before the Brexit vote, the Treasury produced an analysis forecasting that UK house prices could suffer in the event of a Leave vote, with prices lower by between 10 and 18 per cent over two years relative to a Remain vote.

That implied several years of nominal house price value stagnation.