A survey by the Royal Institute of Chartered Surveyors (RICS) showed house sales continued to fall in the three months to the end of July, whilst the number of new instructions and buyer enquiries also dropped. Prices have fallen in London, the West Midlands, East Anglia and the North of England, but surveyors are forecasting that house prices and sales will rebound and increase over the next year.
Simon Rubinsohn, chief economist at Rics, said: “The rebound in the key 12 month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.” The expectation is for house prices to increase by 3% a year over the next five years nationwide, and to lift by 4% each year in London over the same period.
Surveyors have said that a combination of factors have created the downward trend. The report quoted one suggesting it was due to a “seasonal summer slowdown, rather than Brexit panic”.
In addition the Bank of England recently cut base interest rates from 0.5% to 0.25% as part of measures to stimulate the economy. Lower interest rates create a good environment for borrowers, and could encourage more buyers to the housing market, but it makes saving for a deposit tough.
Overall, the outlook is much more positive than it was in the immediate aftermath of the referendum and many estate agents and surveyors are expecting the London housing market to take off again in the coming months.