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House price growth at lowest point for three years as market stalls following Brexit

UK house price growth underwent its biggest contraction for three years in July, according to the Royal Institute of Chartered Surveyors (RISC) monthly survey of surveyors across the country.

According to the figures, just 5% of surveyors saw any sort of house price rise over falls nationally with similarly downbeat figures for other key metrics including buyer enquiries, agreed sales and new instructions.

The survey also found that house prices had fallen outright in areas such as London, the North of England, East Anglia and the West Midlands.

However, many of these downward trends were working their way through the system before June’s EU referendum, with those surveyed also registering a fourth consecutive month of decline in demand from new buyers.

In more heartening news, the RISC’s survey also found that 23% more of surveyors expect house prices to rebound in the next 12 months, albeit at a much slower rate than that experienced last year, after being more evenly split on the issue in last month’s survey.

Simon Rubinsohn, Chief Economist at RISC, commented that a string of ‘mixed economic’ news, including the Bank of England’s latest policy measures, are serving to lower the cost of mortgage finance.

He said: “Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat. However the rebound in the key twelve month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.”

One problem that pre-dates the EU referendum and is continuing to cause issues in the housing market is the lack of UK housing stock, with new instructions also experiencing another decline.

In a stark warning to the government on the current state of housebuilding, RISC says 33% more of those surveyed saw a fall in new instructions and that the supply of new homes is at or around record lows across the UK.

“Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with RICS data showing inventories on agents books around historic lows on average. This is a long running story that may have been exacerbated by recent events but clearly needs urgent action from the new government.”