Brexit uncertainty ‘a major drag’ on UK house prices

As the government stumbles from one crisis to the next over the UK’s departure from the EU, new research suggests Brexit uncertainty is continuing to play a significant role in dampening down the domestic housing market.

The latest RICS residential market survey for March shows a continuing slowdown in buyer demand, while sales are also down, as are new instructions.

And while respondents to the RICS’ latest survey are “more positive” in the long term, the poll found that house prices across the UK would continue to fall for the next six months.

“Whether any [Brexit] deal provides the shift in mood music envisaged by many respondents remains to be seen,” said RICS chief economist Simon Rubinsohn. “But as things stand there is little encouragement to be drawn from key RICS lead indicators.”

Brexit, Rubinsohn said, “remains a major drag on activity in the market, with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty”.

The RICS survey said London and the South-east showed the weakest sentiment towards prices, while across the UK only Scotland and Northern Ireland showed consistent and sustained price growth.

Developers were also becoming more cautious, said Rubinsohn, and the trend in new residential starts was now “flatlining”.

“Against this backdrop there is little possibility of delivering the uplift in supply necessary to address the ongoing housing crisis,” he added.