Outlook for housing market ‘worst for 20 years’

The UK Housing Market Outlook
The UK’s housing market will continue to see house sales slump over the next three months with figures falling to their lowest in 20 years, says one survey.

The Royal Institute of Chartered Surveyors (RICS) quizzed its members and found that 28% believe sales will fall rather than rise over the next three months.

It is the institute’s most downbeat forecast since they started collecting records in 1999.

They say that sales expectations from surveyors are either flat over the next few months or there will be ‘no change’ or sales will be ‘negative’.

House sales will fall across every part of the UK

RICS surveyors say that house sales will fall across every part of the UK and the hardest hit regions will be London and the south east, with 41% of surveyors predicting sales falling there.

There’s also a bleak picture for house sales in Scotland, with 23% of surveyors predicting sales falling and in Northern Ireland, 21% of surveyors have a gloomy outlook.

For surveyors in Wales, 6% say sales will fall.

However, the only region in the UK offering a slightly positive outlook is the north west of England.

There, 2% more surveyors are predicting that house sales will rise, compared to those predicting they will fall.

Buyers are not interested

RICS says that the supply of properties coming onto the market has been slowing for the last six months and it appears as if buyers are not interested either with enquiries falling in the five months to December.

The chief economist at Rics, Simon Rubinsohn, said: “With uncertainty over Brexit ongoing, it’s hardly a surprise and even when allowing for normal Christmas holiday patterns, buyer interest in property was subdued in December.

“This is also reflected in near-term sales expectations worsening.”

He added that looking further ahead, there is a degree of comfort that transactions around the country will stabilise but ‘that feels a long way ahead’ for many of the survey’s respondents.

The housing market outlook from RICS has also been underlined by Capital Economics, an economic research firm, who say that sales will remain weak this year due mainly to Brexit concerns.

‘Housing market will remain weak in 2019’

In a statement, the firm said: “RICS’ December data supports our view that the housing market will remain weak in 2019.

“With Brexit uncertainty to be extended, we expect no or little growth in transactions this year.”

The firm adds that should there be a rebound in the latter half of this year, following some sort of Brexit deal, the UK’s housing market will still be held back by rising interest rates and high prices.

Despite the gloom, house price indices are reporting that house prices grew last year, despite the growing uncertainty with Halifax reporting a 1.3% rise, while Nationwide says house prices increased by 0.5% over the year.

Meanwhile, the Office for National Statistics says that house prices in the year to November 2018 grew by 2.8%.

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