House price growth and market activity are grinding to a halt, according to the Royal Institution of Chartered Surveyors, with London and the South East pulling down the national trend.
Its monthly survey of the housing market found a continued lack of momentum, with low levels of new buyer inquiries for the 17th consecutive month.
Agreed sales were also low and in July there was a “sustained deterioration in the flow of fresh listings coming onto the market”. The number of properties on estate agents’ books is close to a record low.
Those polled did not think that activity would pick up nationally in the next three or 12 months, and in the short term prices are not expected to increase, with the measure at the lowest level since early 2013. However over the next 12 months prices are expected to increase slightly.
This slowing overall trend masks some brighter areas, such as Northern Ireland, the West Midlands and the South West, where house price growth is more buoyant.
Surveyors in central London were the most cautious about any price improvements over the next 12 months, and that negativity is rippling further out of the capital: the South East fell into negative territory, recording its weakest reading since 2011.
Simon Rubinsohn, Rics’ chief economist, said: “Sales activity in the housing market has been slipping in recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time 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 news came as the National House Building Council (NHBC) reported that the number of new homes started in London in the second quarter of this year had fallen to the lowest level since 2012, a drop of 30pc compared to the same period in 2016.
The NHBC provides insurance for 80pc of new homes built in the UK. It added that the number of homes started across the country was largely the same as the same period last year.
The Rics survey also investigated the extent of properties having their prices slashed or selling for under the asking price. Sixty eight per cent of agents reported that the sales prices of homes worth more than £1m were typically below the asking price, while 37pc of those polled said that property worth less than £500,000 was selling for below the asking price.
Separate research by the HomeOwners’ Alliance illustrated the extent of price cuts on the most expensive properties on the market. Homes for sale for more than £2m have had their prices slashed by an average of 10pc, while those in the middle of the market, valued between £200,000 and £500,000, have been reduced in price by just 3pc.
Source: The Telegraph