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UK house price outlook darkest since 2011 - RICS

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UK house price outlook darkest since 2011 - RICS
FILE PHOTO: Estate agent's signs hang from houses in the Selly Oak area of Birmingham, Britain September 25, 2018. REUTERS/Darren Staples   -   Copyright  Darren Staples(Reuters)
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LONDON (Reuters) – British property surveyors are the most downbeat about the short-term outlook for house prices in nearly eight years, and sellers are shying away from putting homes on the market in the run-up to Brexit, a survey showed on Thursday.

The Royal Institution for Chartered Surveyors (RICS) said its monthly house price balance sank to -22 last month from December’s reading of -19, the lowest since July 2012 and a bigger drop than forecast in a Reuters poll of economists.

Asked about the outlook for house prices over the next three months, surveyors expected the most widespread price falls since February 2011.

The survey added to other signs of weakness in Britain’s housing market and much of the overall economy ahead of the scheduled Brexit date of March 29.

“Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market,” RICS chief economist Simon Rubinsohn said.

Britain is on course to leave the European Union without a transition deal unless Prime Minister Theresa May can broker a revised agreement with the bloc that is acceptable to her divided party and parliament.

The volume of property being put up for sale dropped by the most since July 2016, just after Britain voted to leave the EU.

Surveyors reported falling property values across most of England, but gains in Scotland, Wales and Northern Ireland.

Price falls were sharpest in London and southeast England where affordability was already most stretched and where demand has been most affected by higher taxes on investment properties, foreign buyers and property costing over 1 million pounds.

Official data released on Wednesday showed that United Kingdom house prices rose by an annual 2.5 percent in December, the smallest increase since July 2013.

Over the year to come, RICS said surveyors saw prices as broadly flat and expected them to rise by about 11 percent over the next five years.

(Reporting by David Milliken)

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