RICS survey says EU referendum, devolved elections and stamp duty changes have caused market uncertainty
Stamp duty changes, the EU referendum and forthcoming devolved elections will cause house prices to drop as uncertainty in the housing market kicks in, according to the latest figures from the RICS.
In its monthly survey of residential agents, the institution found the uncertainty has been most strongly felt in central London, where 38 per cent more respondents expected to see house prices fall than rise over the next three months.
On average across the UK, two per cent more respondents expect to see prices fall than rise over the coming months.
The survey found that short-term market confidence has flattened after the winter’s buy-to-let rush, where buy-to-let purchasers looking to beat the government’s tax changes caused an unseasonal boost in home-buying activity in December, which led 43% more surveyors to say they expected price rises in the next three months in December than forecast falls.
RICS chief economist Simon Rubinsohn said: “As expected, the buy-to-let rush has now run its course, and as a natural result, the market is starting to slow.
“Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May’s devolved elections are no exception. Likewise, the EU referendum, is likely to be an influencer in terms of the damper outlook for London in particular.”
Rubinsohn added that in the long-term, regardless of the result of elections and the EU referendum, the imbalance between demand and supply will see house prices rise by 25 per cent over the next five years.