UK house prices at six-year low amid Brexit uncertainty - RICS

The UK property market fell to its lowest level in more than six years last month as Brexit uncertainty meant that buyers and sellers opted to sit tight, according to the latest survey from the Royal Institution of Chartered Surveyors.

The RICS house price balance dropped to -11 last month from -10 in October, marking its lowest reading since September 2012.

Meanwhile, the number of people looking for a new home fell again in November, with the net balance down to -21 from -15 in October, its lowest level since September 2017, mostly on the back of Brexit-related uncertainty.

The regional picture was varied, with house prices falling most notably in London, the South east and East Anglia, while prices in the South West, East Midlands and North East were broadly flat. Prices increases were seen in Northern Ireland, Scotland, the West Midlands, Wales, Yorkshire & Humber and the North West.

Sales expectations for the last three months cast a downbeat outlook for the market, with contributors saying they don't expect to see any change on the horizon. Sales expectations for the coming three months slumped to -23 in November from -6 the month before. This was the most substantial decline in this series since the EU referendum.

RICS chief economist Simon Rubinsohn said: "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. Indeed, 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. Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon. 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."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the survey shows that the downturn in the housing market is intensifying as households become increasingly concerned about the calamitous Brexit process.

"Until households can be sure that the economic status quo won’t change next year, we expect house prices to struggle. But even further ahead, house prices are set to rise less quickly than households’ incomes, as the MPC likely will pick-up the pace of interest rate hikes next year."