LONDON: British house prices are falling on the broadest basis in more than six years, though the steepest declines remain focused in London and southeast England, a monthly survey of property valuers showed on Thursday.
The Royal Institution of Chartered Surveyors (RICS) said its house price balance sank to -10 in October, its lowest since September 2012, from -2 the month before, a bigger fall than any economist had predicted in a Reuters poll.
The RICS data represents the difference between the proportion of surveyors who see falls compared with rises in property prices.
Direct measures of house prices, such as those published by mortgage lenders Halifax and Nationwide, have not shown outright price falls but do show the weakest growth in over five years.
Britain’s housing market has slowed since 2016, particularly in London where higher purchase taxes on houses costing over 1 million pounds ($1.3 million) and less foreign investor interest since the Brexit vote have had the most impact.
“Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment,” RICS economist Simon Rubinsohn said.
RICS said prices fell across southern and eastern England, but grew in most of central and northern England, and rose strongly in Scotland and Northern Ireland.
“Although the tone of much of the newsflow surrounding the housing market remains downbeat, this continues to disproportionately reflect developments in the south and east of England with the picture remaining rather more resilient in many other parts,” Rubinsohn said.
Sales volumes, however, were flat or negative across almost all of the United Kingdom.
Property valued at up to 500,000 pounds typically sold at or slightly above its asking price, but three quarters of homes marketed at over 1 million pounds failed to reach their asking price, RICS said.
Finance minister Philip Hammond acknowledged in parliament earlier this week that property purchase tax receipts had fallen since rates rose for the most expensive homes and exemptions were brought in for first-time buyers. But reversing changes would have significant redistributive consequences, he said.