UK economy

UK housing price growth is at its weakest pace in more than four years: RICS

PUBLISHED : Thursday, 10 August, 2017, 7:47am
UPDATED : Thursday, 10 August, 2017, 7:47am

British house prices rose at their slowest rate in over four years last month, while the number of sales slowed because of a limited supply of property and continued political uncertainty, a property industry body said on Thursday.

The Royal Institution of Chartered Surveyors (RICS) said its monthly house price balance dropped to +1 in July from +7 in June, its lowest since March 2013 and below all forecasts in a Reuters poll of economists.

The outlook for prices over the next 12 months was also the weakest since just after last year’s vote to leave the European Union, RICS added, though outright price falls seemed unlikely at a national level.

“There is no real indication that the housing market will become materially more affordable any time soon,” RICS chief economist Simon Rubinsohn said.

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

Over two thirds of homes valued at more than 1 million pounds (US$1.3 million) failed to reach their asking price, with over a quarter selling for more than 5 per cent less than what the owner wanted. Most property advertised at more than 500,000 pounds failed to reach its asking price too.

The number of houses being put up for sale fell for a 17th consecutive month in July, with property agents having record-low amounts of property to sell.

“Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come,” RICS chief economist Simon Rubinsohn said.

“The lack of new build in the wake of the financial crisis is a fundamental factor weighing on (transactions).”

Britain’s housing sector has slowed sharply since the vote in June 2016 to leave the European Union, when prices were growing by almost 10 per cent a year, compared with growth rates of closer to 2 per cent now according to mortgage lender Halifax, its weakest in more than four years.

Economists polled by Reuters in May on average predicted that house prices would rise by around 2 per cent a year through to the end of 2019, slower than in the previous Reuters poll published in February.