10 Aug 2017

Housing market sees further slowdown

Housing market figures from the Royal Institution of Chartered Surveyors (RICS) appear to show that the growth in house prices is slowing, as the organisation forecast flat house prices and rents for the rest of the year.

A net balance of 1% of surveyors posted a rise in house prices in July, while 7% saw a rise in the previous month. The 1% of surveyors reporting a rise in prices was the lowest figure since March 2013.

The overall figure also hides large regional variations. In London and the South East, in particular, most surveyors reported that prices were falling, though areas such as the South West and Northern Ireland showed that prices were growing, helping to balance out the nationwide figure.

Simon Rubinsohn, RICS’ chief economist, said:

“Sales activity in the housing market has been slipping in recent months and the worrying aspect of this latest survey is the suggestion that this could continue for months to come.

“One reason for this is the recent series of tax changes, but this is only part of the story. Lack of new builds in the wake of the financial crisis is a more fundamental factor weighing on the market”.

The survey also looked at the number of properties that are sold with a gap between the original asking price and the selling price, which is particularly prominent in higher-value homes.

Two-thirds of homes originally marketed at £1 million or above were sold for less than the asking price. Similarly, 37% of homes listed at £500,000 or less were sold for lower than their asking price.

By Liam Cross