Election Hits House Prices

Published: 18th May 2017

Surveyors in the UK are the most pessimistic about house prices since the Brexit Vote last year. The recent call for an election has once again increased the level of caution that buyers have, which is ultimately impacting house prices.

The Royal Institution of Chartered Surveyors (RICS) has said that its measure of how prices are likely to behave in the next three months has dropped from +11 to +4. However this is a decrease in expectation; they are still expecting house prices to rise, just slower than they have been.

RICS’s main hour price index, which measures how average prices behaved over the past three months were holding at +22 until April, at which point they were predicted to drop to +20.

RICS chief economist Simon Rubinsohn said:

“Recent and forthcoming tax changes (are) having a material impact on transaction levels, particularly at higher price points. Uncertainty relating to the forthcoming general election is also highlighted by some respondents as a reason for inertia,”

Although, after the Brexit Vote Britain’s economy defied expectations by improving, rather than failing. However, the economy since the start of the year has slowed. Mortgage lenders Halifax and Nationwide have reported month-on-month falls in house prices and the slowest annual price growth in nearly four years at less than 4 percent.

Despite of the above, RICS have said that its member are upbeat about the longer term outlook of house prices, with a prediction that they will rise over the next 12 months. Their reasoning is the housing shortage, which is ultimately driving competition.

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