The UK housing market has been pushed to its weakest point since 2012 as the reality of Brexit sets in for both sellers and buyers.
In November, indicators for prices, and supply and demand all fell to lows not seen for 6 years, according to The Royal Institution of Chartered Surveyors (RICS).
Last month saw the lowest property price balance since 2012, which, dragged down by low demand stood at -11%, down from -10% in October.
It has been reported by nearly half of surveyors that sellers and buyers are holding off because of political uncertainty.
London and the south east – the regions in which property prices remain staunchly high- suffered the most severe price falls. This is in part due to the fact that the most expensive houses are exposed to costlier purchase taxes, but also suggests that the impact of Brexit on the financial services sector of the capital is in doubt.
House prices in the south west, east Midlands and the north east have remained broadly constant. The north west, Yorkshire and Humber, Scotland, West Midlands and Northern Ireland saw price rises.
The net balance of people looking for a new home fell again another 6% from October, leaving the balance at -21%, which is the lowest since September 2017.
Many surveyors and agents said that the market’s seasonal slowdown had begun before is usual. Mark Duckworth, of Martin & Mortimer in Ely, said: “The Brexit effect is best described as a cold and wet blanket which is depressing appetite for property.”
RICS said that the number of new properties listed for sale fell for the fifth month to a net balance of -24%. In the face of the fastest rate of decline for over two years, estate agents only have 42.1 homes for sale on average.
The number of agreed sales also fell, dropping 5% to a -15% net balance. This was reflected in almost all UK regions.
Simon Rubinsohn, Rics’ chief economist, said: “It is evident … that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market. I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.
“Caution is visible among both buyers and vendors and where deals are being done they are taking longer to get over the line. The forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon.”
He also suggested that the weakening market could even trigger a slowdown in property construction: “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.”
Halifax, Britain’s biggest mortgage lender also found that house prices are grew at an annual rate of 0.3% in November, the slowest rate since December 2012, echoing concerns for the property market in 2019.