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UK surveyors see weakest house price outlook since Brexit vote - RICS

UK surveyors see weakest house price outlook since Brexit vote - RICS
FILE PHOTO: Terraced houses are seen in Primrose Hill, London, Britain September 24, 2017. REUTERS/Eddie Keogh   -   Copyright  Eddie Keogh(Reuters)
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By David Milliken

LONDON (Reuters) – British surveyors are the most downbeat about house prices since the Brexit vote in 2016 with some unsettled by reports that Bank of England Governor Mark Carney warned ministers of a possible house price crash if Britain leaves the EU with no deal.

The Royal Institution of Chartered Surveyors (RICS) said its headline house price balance fell to a four-month low of -2 in September, below all forecasts in a Reuters poll.

The outlook for prices in three and 12 months’ time was the lowest since June 2016.

“Uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet,” RICS Chief Economist Simon Rubinsohn said.

Last month British media reported Carney privately told ministers that mortgage rates could spiral and house prices fall by 35 percent over three years in a chaotic no-deal Brexit.

The BoE declined to comment on the remarks and whether Carney had been referring to extreme financial scenarios used for previous BoE tests of banks’ financial health.

Carney himself did not address the reports in a public appearance on the day they appeared, but reiterated that the BoE had tested banks against “very severe” scenarios including “dramatic house price falls”.

Britain’s housing market overall has slowed since the Brexit vote in June 2016. Official data for July showed prices up 3 percent on the year compared to gains of around 8 percent at the time of the referendum.

The headline figure masks big regional variations. Prices are falling in London, which saw the biggest rises before the Brexit vote. The city is vulnerable to Brexit worries among foreign investors and any barriers to financial services trade.

By contrast, RICS said prices continued to rise in most of the United Kingdom outside London and neighbouring areas.

Sales were slow almost everywhere, however. New buyer enquiries were the weakest since March and houses were taking the longest to sell since RICS started asking its members about this regularly in February 2017.

(Editing by William Schomberg)

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