The RICS UK Residential Market Survey for June, published only hours before the Bank of England decision to hold off on new stimulating measures became public, was pessimistic about the UK’s housing market in the short term and conveyed long term post-Brexit uncertainty.
Commenting on the impact of Brexit, RICS Chief Economist Simon Rubinsohn said: “The RICS UK Residential Market Survey for June 2016 indicates uncertainty fuelled by the EU referendum has resulted in a marked drop in activity in the housing market.”
Both buyer inquiries and supply of property on the market have continued to fall over the past month, continuing the down trend which has been observed over the past three months. The most worrying development in recent activity is th sharp drop in buyer inquiries to the lowest since the financial crisis. Similarly, the 45% increase in surveyors reporting reductions in new instructions than the month before, represents the steepest fall ever recorded by RICS and therefore clearly extends former trends.
Recorded sales have also dropped continuously over the past 3 months and this trend is expected to continue over the coming months. While housing prices are still growing in most UK regions, price growth has slowed considerably. In London house prices continue to decrease on average. Most decreases are seen in Central London and prices are expected to be lowered further in the next months.
The report gives an outlook over the next 12 months still characterised by further drops in growth rates and even prices, while rents are expected to remain constituent. This can be attributed to post-Brexit uncertainty and market jitters, but also to the recent tax changes which affected London and Southern England the most.