UK housing market stagnates as London price drop continues

-A +A

LONDON (Dec 14): The UK housing market is stuck in a rut.

A survey by the Royal Institution of Chartered Surveyors Thursday showed a national gauge slipped to zero in November, a result consistent with no change in prices, while the three-month outlook is also broadly flat. London remains a weak spot, with the most negative current reading, while respondents also reported downward pressure on prices in the Southeast, Northeast and East Anglia.

The report is the latest to paint a grim picture of the market in the capital, with brokers flagging Brexit uncertainty as one reason for sluggish sales. The Bank of England’s interest-rate hike was also flagged as a potential drag on the UK market, and there’s thus far little evidence that the government’s move to scrap stamp duty for some first-time buyers in last month’s budget is lifting sentiment.

The London market “remains slow, mainly influenced by political instability and Brexit concerns,” Allan Fuller, of Allan Fuller Estate Agents in Putney, said in the report. Toby Whittome of Jackson-Stops said activity will remain at “extremely reduced levels.”

House-price growth has cooled this year thanks to a sluggish economy and a squeeze on consumers in the wake of the vote to leave the European Union. Official data Tuesday showed UK house-price growth slowed to 4.5% in October, about half the rate seen in the middle of last year, while London prices posted an outright decline for a second month.

The outlook is bleak. A report from Rightmove Plc this week showed London’s property market is in for another rough ride next year, with home values in the capital likely to fall another 2% in 2018 after a 1.8% decline this year.