Uncertainty over the UK’s economic future is suspected to be the reason for a recent drop in house prices in London and the South-East, claim surveyors – who predict that prices are likely to start falling in the South-West and in Yorkshire & Humberside too. Prices are likely to hold steady, or even rise, in other parts of the country.
Other causes for the fall in prices are the increase in stamp duty (the tax paid on house sales) and changes in the tax on buy to let properties, both of which came into effect in April, and a record low number of houses being put up for sale, reflecting the overall inadequate supply of homes.
The Royal Institution of Chartered Surveyors said the fall, the first in six years, will not last long, with prices likely to rise again as soon as the referendum on the EU has been held.
The Institution surveyed 326 surveyors who cover work in 600 offices across the UK.
More surveyors expected prices to fall than expected prices to rise, and many more surveyors reported a reduction in their workload than those who reported an increase – another sign that the sales market is slowing down. However, the Institution warned that the present situation, in which house prices are unaffordable for most people who would like to buy their own property, is unlikely to change.
The news will be of concern to the Government, which needs to keep house prices high in order to avoid another crash like the one in 2008, from which the UK economy has not yet recovered.
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