Continuing uncertainty caused by the Brexit process is causing buyers and sellers to sit tight in increasing numbers, according to the November 2018 RICS UK Residential Market Survey.
The results from the latest survey show a weaker trend in sales than previous months with the headline indicators for demand and supply falling once again, as almost half of respondents cite political uncertainty caused by Brexit as impacting the UK housing market.
The number of people looking for a new home fell again in November with a net balance of -21% down from -15% in October, with many comments attributing this to Brexit uncertainty.
Another contributing factor is the continued limited choice of properties for sale. The number of new properties being listed for sale fell for the fifth consecutive report, and the net balance of -24% was the fastest pace of decline in supply noted in twenty-eight months.
This lack of new stock is impacting estate agents’ average stock levels with agents now only having, on average, 42.1 homes for sale. The number of new appraisals by property valuers is also down in comparison to a year earlier.
Meanwhile the regional picture remains varied, with house prices falling most notably in London, South East and East Anglia whilst the South West, East Midlands and North East are broadly flat. Rises were seen in Northern Ireland, Scotland, West Midlands, Wales, Yorkshire & Humber and the North West.
In the lettings market, demand from prospective tenants is holding steady, however, the number of new instructions continues to fall signalling a continued decline in the supply of fresh rental stock. As a result, rents are expected to rise modestly over both three- and twelve-month horizons.
Simon Rubinsohn, RICS Chief Economist said: “It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market. Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.
“Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line. Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon. The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis.”