House price inflation dropped further in June, as political uncertainty stifles the housing market with agreed sales, new buyer enquiries and new instructions on the decline, according to a new market survey.
The RICS Residential Market Survey for June has revealed that at a national level, 44% of those surveyed said that domestic political uncertainty was the biggest factor contributing to the state of the market. By comparison, 27% highlighted Brexit as the most important factor. Respondents in London, however, cited Brexit and the changes to Stamp Duty as the reasons behind the loss in momentum.
June's survey results show that 7% of surveyors across the UK witnessed a rise in prices at the headline level. However, compared to 17% of surveyors seeing a rise rather than a fall in May, this makes it the lowest reading since July 2016.
The trend is not reflected across the whole country. While the pace of decline in house price inflation in Central London continues, with 45% more respondents seeing a decline, in Northern Ireland 41% more surveyors saw a rise in prices. In Wales 38% more respondents also saw a rise rather than a fall.
Prices continue to rise in the West Midlands and the North West as well (+33% and +28% respectively), whereas the South East and East Anglia are showing a flatter trend.
Overall activity and transaction levels were subdued in June. Respondents reported a decline in newly agreed sales and 5% more also saw a fall in sales. The decline reflects the lack of stock coming on to the market and greater caution from buyers.
RICS predicts sales to remain broadly stable over the next three months, but the twelve month sales expectations indicator reading, while still pointing to an increase in activity, has slipped to its lowest level since the referendum.
New instructions fell again for the sixteenth month in a row, as 19% more respondents reported a fall in property coming on to the market, and average stock levels have slipped to a new low. Both of these factors are significant for future activity.
Simon Rubinsohn, RICS Chief Economist, said: "The latest results demonstrate the danger, however tempting, of talking about a single housing market across the country. RICS indicators particularly regarding the price trend are pointing towards an increasingly divergent picture. High end prime properties may be seeing prices slipping back but, for good or ill, prices are continuing to move higher in many other segments of the market. Indeed, the disaggregated data suggests that this will continue to be the case over the coming months.