Deceleration in house price inflation likely
Further deceleration in house price inflation is looking more likely, suggests the June RICS UK Residential Market Survey.
The headline price balance eased from 17% to 7% in June and the capital continues to return the most negative net balance with no sign of easing in the pace of decline.
The survey also reveals that the price balance is now more subdued in the South East, whilst in East Anglia and the North there has been little change from recent readings.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Overall sentiment within the RICS survey has remained quite pessimistic over the last few months, and today’s outlook of a dip in house prices and market activity is not surprising.
“Yet when compared to the wider economic and political landscape, the housing market has continued to amaze many. It has remained consistently robust, despite everything we have seen over the last 12 to 18 months.
“However, today’s results still highlight the growing issue of our country’s housing supply.”
Average stock levels have seen a marginal slip to record low levels; however most parts of the UK show a fairly similar pattern to headline numbers.
Despite rental expectation series rising in June, but the survey outlines that the picture remains consistent with rents at headline levels.
Peter Williams, executive director of IMLA, added: “For another consecutive month, RICS’ survey points to a housing market gradually losing momentum, with members reporting dwindling numbers of enquiries, instructions and sales.
“However, whilst activity in the housing market may be beginning to slow, long-term price growth will be supported by supply-side shortages across the country and high customer demand.
“Alongside further commitments to the construction of housing of all tenures, ensuring ready access to mortgage finance should be a key objective of Theresa May’s new government over the course of the coming year.”