The UK housing market continued to soften in October according to the latest survey of chartered surveyors as political uncertainty bit into confidence.
The net balance of surveyors reporting price rises in the month slipped to +1 per cent, down from +6 per cent previously, according to the Royal Institution of Chartered Surveyors (RICS).
For London the net balance slumped to -63 per cent, the worst reading since 2009, although it was still positive in many other areas such as the North West, Wales and Scotland.
More expensive homes are under significant downward price pressure, with 70 per cent of surveyors reporting that offers for homes in the £1m plus bracket are coming at below asking price.
Some 60 per cent also reported lower offers for homes on the market priced between £500,000 and £1m.
The Bank of England raised interest rates last week for the first time in a decade, something that is expected to slow the housing market further over the coming months.
“The combination of the increased cost of moving, a lack of fresh stock coming to the market, uncertainty over the political climate and now an interest rate hike appears to be taking its toll on activity in the housing market,” said Simon Rubinsohn, the chief economist of RICS.
Referring to the troubles of Theresa May in the face of a divided Cabinet and stalled Brexit negotiations, Neil Foster, a surveyor in Newcastle Upon Tyne, said: “Prolonged political uncertainty and weak direction from the government is hampering sentiment amongst buyers and sellers. We are in for a long winter.”
“Continued political and economic uncertainty is negatively influencing the marketplace,” agreed Davis Lewis, a Devon surveyor.
However, other indicators have suggested a stabilization in the housing market recently.
Halifax’s index pointed to annual growth in house prices of 4.5 per cent in October, up from 4 per cent in September.
And the Nationwide reported a slight pick up in house prices in the month, with its index rising at an annual rate of 2.3 per cent, up from 2.5 per cent previously.
Before last year’s referendum, the Treasury controversially projected that house prices in 2018 could be 10 to 18 per cent lower than otherwise in the event of a Leave vote.