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House prices ‘expected to fall’ in the short term

The following article has been extracted from the BBC News website:

Chartered surveyors are predicting a short-term drop in UK house prices over the next three months – the first fall in more than six years.

Members of the Royal Institution of Chartered Surveyors (Rics) who work in estate agents said London and East Anglia would be most affected.

Surveyors expecting prices to drop outnumbered those expecting prices to rise by a majority of 10%.

Average house prices last fell on an annual basis in the Autumn of 2009.

However Rics said the fall was likely to be short-lived.

It cited the EU referendum, and a cooling of the market following stamp duty changes in April.

“What we are looking at is a short term drop caused by the uncertainty resulting from the forthcoming EU referendum, coupled by a slow-down following the rush to get into the market ahead of the tax change on the purchase of investment properties,” said Simon Rubinsohn, Rics chief economist.

“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.”

house price chart

‘Record low’

The survey of 326 surveyors, representing 600 offices across the country, reported that prices are already falling in London.

A majority expected forthcoming price reductions in a further four areas:

  • East Anglia
  • South East England
  • South West England
  • Yorkshire and Humber

However prices in Scotland, Wales, Northern Ireland, the Midlands and the North are expected to rise.

The survey also suggests that the number of properties coming on to the market is at a record low.

Surveyors who saw fewer new instructions last month outnumbered those who saw more instructions by 30%.

That is the largest figure since the current survey began in 1999.

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