UK housing market varying widely by region - RICS
The latest survey from the Royal Institute of Chartered Surveyors showed the UK housing market continued to lack momentum in September as demand from new buyers and sales fell again and the shift in interest rate expectations contributed caution in a slowing market.
Surveyors reported a decline in both sales and new buyer enquiries with sentiment now flatter than any point since the referendum result, with a 20% more respondents in September noting a fall rather than rise in demand from would-be buyers, extending the run of negative readings into a sixth month.
Alongside this, 15% more replied to the monthly survey noted a fall in agreed sales rather than a rise which is the lowest since July 2016.
London and the South East remained the biggest decliners in sales, but weakness in transactions was widespread during September. In fact, only Wales and the South West were cited to have seen an increase in sales, while all other parts of the UK saw sales flat.
For the next three months, RICS found expectations slipping to -1% from +7% previously, while the twelve month outlook was also flat at the national level, although respondents are a little more optimistic in Wales, Scotland and Northern Ireland.
Simon Rubinsohn, RICS chief economist commented: “It was always questionable to talk about the housing market as a single entity but the stark divergence in key readings from the latest RICS survey demonstrates in the clearest possible terms just how important the regional narrative is at the present time.
"In part, this is a reflection of affordability constraints hitting the higher priced segments of the market. It is perhaps also indicative of a shift in economic momentum in the face of the increasing possibility of the first hike in base rates in over ten years."
While London remained firmly negative for house prices and the balance in the South East was negative to a lesser extent but for a fourth consecutive month, East Anglia and the North East also saw prices fall in September but the rest of the UK continued to see house prices rise.
Looking ahead to the next three months, sentiment turned negative with 8% more respondents expecting prices to fall at a national level; primarily being driven by the cautious outlook from respondents in London and the South East.
Northern Ireland and Scotland were the only two areas where surveyors are confident that prices will rise in the near term.
Rubinsohn said there was continuing evidence of shortage of housing stock in the new build and second hand market.
"And despite the announcements at the recent Conservative Party conference, it is hard to envisage this changing any time soon. Against such a backdrop, prices in general are likely to remain elevated and indeed, as the survey indicates, continues to rise over the medium term in most parts of the country.”