Uncertainty and gloom about Brexit are likely to hit the UK housing market well into next year, surveyors believe.
The latest report from the Royal Institution of Chartered Surveyors (RICS) predicts that the number of homes being sold – and their prices – will fall over the next three months.
Fewer people are interested in moving, and fewer want to sell.
Each home is already taking an average of four months to sell, the longest period since records began in 2016.
“It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market,” said Simon Rubinsohn, RICS’ chief economist.
“Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.”
Reacting to the report, experts at Capital Economics said they expected the number of house sales to continue falling next year.
However they estimate that prices will still rise by 1% in 2019.
House building
RICS is also concerned that the rate of house-building itself could slow down, because of Brexit worries.
“The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis,” said Mr Rubinsohn.
The RICS survey – carried out in November – suggests that most surveyors are considerably more pessimistic about the market than they were just a month before.
The Bank of England’s governor, Mark Carney, said last month that house prices could fall by as much as 30% in the event of a “disorderly” Brexit – in other words a no-deal scenario.
However there is some regional variation, with surveyors in the north of England and Northern Ireland less pessimistic.
Surveyors in these two areas were the only ones who said they expected prices to rise over the next three months.
‘Farcical’
David Nesbit, a surveyor from Portsmouth, has views typical of many of his colleagues in the south of England.
“Brexit, the Bank of England and Christmas – what more to depress sentiment! A very difficult period is ahead,” he said.
“The market is currently being affected by the uncertainty of Brexit and potential interest rate rises. We expect the market to remain difficult for the next two years.”
Mark Hunter, from Doncaster, said the outlook for the property market remained very uncertain.
“The Brexit negotiations are now becoming farcical and affecting confidence. The thought that anything could happen in the next few months is a very worrying prospect,” he said.
