Property sales, buyer enquiries and new instructions all failed to improve in August following a brief early summer bounce in the property market.
Property sales resumed their downward trend in August as ongoing Brexit uncertainty continued to weigh on the market.
The increase in buyers seen in the early summer months also came to an end, with new enquiries flattening out, according to the Royal Institution of Chartered Surveyors.
Unsurprisingly, given the generally downbeat mood, the number of new homes being put up for sale also failed to increase.
Simon Rubinsohn, RICS chief economist, said: “It is hard to get away from the shadow being cast over the housing market by the seemingly never-ending Brexit saga.
“That said, the key RICS activity indicators have actually remained relatively resilient until now pointing to only a modest dip in transactions across the country rather than anything more severe.”
Why is this happening?
The political and economic uncertainty caused by Brexit is causing would-be buyers and sellers to put their moving plans on hold until the outlook is clearer.
While the market enjoyed a slight rise in activity in the early summer, this now appears to have petered out, as people remain cautious ahead of the current October 31 deadline for the UK to leave the EU.
On a more positive note, the fact that both buyers and sellers are adopting a ‘wait and see’ approach has provided some support for house prices, which remained largely unchanged in August.
Who does it affect?
RICS said the housing market had weakened in nearly all areas of the country during the past two months.
In terms of sales, Wales and the North East were the only regions in which estate agents presented a more upbeat picture.
The finding is in line with other housing market data which suggests activity levels are more buoyant in areas where affordability is least stretched.
What’s the background?
Going forward, sales are expected to fall further in the coming three months, with estate agents feeling the most pessimistic about the short term since February this year.
The situation is expected to have improved “only very modestly” in 12 months’ time.
But surveyors are more optimistic about house prices, and while they are predicting near-term falls, they expect property values to be higher a year from now.
Meanwhile, in the lettings market the mis-match between supply and demand worsened.
Inquiries from potential tenants increased for the eighth month in a row, while new instructions from landlords fell, continuing the trend begun in 2016.
Unsurprisingly, the situation is expected to push rents higher during the coming three months.
Top 3 takeaways
- Property sales resumed their downward trend in August as ongoing Brexit uncertainty continued to weigh on the market
- The increase in buyers seen in the early summer months also came to an end, with new enquiries flattening out
- The number of new homes being put up for sale also failed to increase