The Royal Institution of Chartered Surveyors (RICS) says the UK is becoming a two-tier property market featuring rising prices in Northern Ireland, the West Midlands and the South West but falling prices and sales activity elsewhere, particularly in London.
RICS says London’s ongoing reductions in house prices and both weak demand and supply are spreading into the surrounding regions particularly in the South East, which saw the weakest reading for prices from RICS members since 2011.
Its July UK Residential Market Survey also highlights softening prices in the prime £1m+ property price bracket; 68% of agents involved in this market said properties were not achieve their asking price.
RICS says a third of these agents said properties were coming in at up to 5% less than the asking price, with a further quarter of agents saying agreed prices were between 5% and 10% below their asking price.
And for properties between £500,000 and £1m, nearly 60% of agents said properties were failing to achieve their asking price.
More worrying for sales agents is that the number of new instructions during July dipped, the 17th month in a row during which properties coming on to the market decreased.
RICS says that most common explanation given by its members for this situation is ‘political uncertainty’ putting people off moving home or up the property ladder.
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,” says RICS’ Chief Economist Simon Rubinsohn (pictured, left).
“One reason for this is the recent series of tax changes, but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market.
“And there are some very real consequences for the economy from all of this including the impact on the ability of people to be mobile when looking for work.”
Stephen Wasserman, Managing Director at West One Loans (pictured, right), says: “Political and economic upheaval, alongside the ongoing supply versus demand issue, is continuing to plague the property market, damping buyer and investor demand.
“Despite today’s figures painting another downcast picture of activity, the housing market is resilient and we’re optimistic that while we may continue to see a few stutters in due course, the overall market will grow in time.
“The bridging sector in particular has been flourishing in recent months, as those looking to capitalise on quick sales can do so with the flexibility and speed that this unique type of financing offers, and we expect this trend to continue.”