House price growth is 'coming to a standstill', surveyors say

HeraldScotland

For homes listed at between £0.5m and £1m, a combined 57% of contributors noted that sales prices were coming in lower than asking prices, with the most popular answer being up to 5% below (37%).

Nevertheless, this national figure conceals diverging trends across parts of the UK.

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: "It would appear that, much like the current British summer, as far as surveyors are concerned the temperature of the United Kingdom housing market is variable across different parts of the country, with some areas, such as the west midlands and south-west, seeing house prices continue to increase at significant levels, yet others, such as London and the south-east, seeing prices cool".

A net balance half of all surveyors in London say property prices have not risen in the last three months, while the South East also recorded a negative reading, the weakest for the region since 2011.

The group's UK Residential Market Survey is regarded as the best lead indicator for house prices.

During the previous two months, there has been a particular gap between the original asking price and the selling price - most noticeably in homes at the top end of 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.

Looking ahead, near term price expectations continue to signal a flat trend over the coming three months at the headline level.

The balance of surveyors reporting price rises fell from +7% to just +1%. Again, central London continues to exhibit the most cautious twelve month projections relative to all other parts of the UK.

HeraldScotland
SURVEY: The UK housing market is 'faltering' and price growth is 'nearing zero'

This month, sales activity continues to lack momentum, with the net balance readings for buyer enquiries and agreed sales remaining firmly negative, at -14% and -17%, respectively.

Housing activity in the United Kingdom disappointed in July, with both sales and enquiries seeing a continued lack of momentum, according to a new survey.

In the private rental sector, the quarterly (seasonally adjusted) figures are also consistent with a somewhat subdued picture. Although tenant demand continued to edge higher, it did so at the slowest quarterly pace going back almost 20 years.

Rent price expectations are now only very modestly positive for the coming three months. And, looking a little further, they are projected to increase by a little under 2% nationally over the next year.

Simon Rubinsohn, chief economist at Rics, said recent tax changes and a lack of new homes after the financial crisis are weighing on the market.

"However, the fundamental issue which remains and prevents a significant advancement in our housing market is a chronic lack of supply". 'We're optimistic that while we may continue to see a few stutters in due course, the overall market will grow in time, ' he said.

More expensive property was struggling to sell for close to its asking price.

Richard Sexton, director at e.surv, doesn't think housing professionals should be too concerned by the slowdown indicated by RICS. The whole market has been steadily growing and we have seen increases in mortgage approvals year-on-year, driven by remortgage activity, particularly in the North.

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