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UK housing market outlook worst on record - RICS

By Michele Maatouk

Date: Thursday 17 Jan 2019

UK housing market outlook worst on record - RICS

(Sharecast News) - The outlook for the UK housing market over the next three months was the worst on record in December as uncertainty over Brexit took its toll, according to the latest survey from the Royal Institution of Chartered Surveyors.
The net balance of surveyors expecting sales to drop came in at -28, marking the worst reading since the series began in 1999.

Meanwhile, the net balance of surveyors reporting that house prices have risen over the last three months fell to -19 in December from -11 the month before. This was the fourth consecutive negative reading and fell short of analysts' expectations for a reading of -13.

Looking ahead, the outlook for prices over the next 12 months was broadly flat. With the exception of London and the South East, prices were anticipated to either rise or hold steady across the other UK regions over this time horizon.

RICS chief economist Simon Rubinsohn said: "It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued. This is also very clearly reflected in a worsening trend in near term sales expectations. Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts, but that moment feels a way off for many respondents to the survey.

"Meanwhile it is hard to see developers stepping up the supply pipeline in this environment. Getting to the government's 300,000 building target was never going to be easy but pushing up to anywhere near this figure will require significantly greater input from other delivery channels including local authorities taking advantage of their new-found freedom."

Pantheon Macroeconomics said surveyors clearly think that Brexit uncertainty is to blame.

"While they expect prices to keep falling at a similar rate over the next three months, the 12-month price expectations balance turned positive in December for the first time since May.

"We continue to think that Brexit uncertainty will subside soon, as the government is forced to pivot towards a soft Brexit with only limited economic consequences; that shift, in turn, should help consumers' confidence to recover and restore some life to the housing market. Nonetheless, the MPC will have to start raising Bank Rate at a faster rate than in recent years soon, now that very little slack remains in the economy and underlying inflation is rising."

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