UK house price growth has stagnated with many properties marketed at more than £1 million in particular being sold below the asking price. The latest house price survey from the Royal Institute of Chartered Surveyors (RICS) revealed both a lack of momentum in sales and in actual enquiries.
After reporting last month that estate agents had reached an all-time low in the amount of stock on their books, the RICS’s latest analysis of the UK property market showed little increase in the number of properties being marketed and consequently the number of new instructions fell for the 17th consecutive month in July.
The RICS gauges the temperature of house sales in the UK through its monthly review in which its members – the chartered surveyors who make up the nationwide panel exclusively used by Surveyor Local – report on the business they are seeing.
Diverging trends across the nation
The latest report said house prices remained unchanged over that period but noted diverging trends across the UK. London and the south-east, traditionally the strongest performer in sales and price growth, has continued to decline with the weakest results since 2011.
Seven-figure properties in particular have failed to reach asking prices: 68 percent of respondents said sales prices for those marketed at £1m+ were sold at below the asking price. Lower prices were also reflected in those listed at between £500,000 and £1m with 57 percent pointing to a selling price below the asking price.
However, that divergence the survey pointed to can be seen in rising prices in, for example, Northern Ireland, the West Midlands and the south-west where enquiries and transactions are also up.
Impact felt on mobility
Simon Rubinsohn, the RICS’ chief economist, said: “Sales activity in the housing market has been slipping in the recent months, and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come.
“One reason for this is the recent series of tax changes, but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market. And there are some very real consequences for the economy from all of this, including the impact of the ability of people to be mobile when looking for work.”