A gauge of UK house prices dipped to its lowest in more than five years last month, according to the Royal Institution of Chartered Surveyors, with the slowdown most acute in London and the southeast.
RICS’s gauge of prices dropped to minus 8, the lowest since November 2012, the organization said in a report. The descent into negative territory follows months of stagnating prices, and surveyors don’t expect any pick-up in the near term.
“The market is not really functional at present,” said Donald Leslie, from chartered surveyor Donald Lesie & Co. in Amersham, a town around 30 miles (48 kilometers) northwest of London. “Low stock, low demand, stamp duty, lack of affordability, massive uncertainty” are contributing factors, he said.
The report is the latest to show strain in the UK property market, with a survey from mortgage lender Halifax this week suggesting prices plunged the most in almost eight years in April. The figures, coupled with recent data showing consumers remain under pressure and growth is slowing, provide an uncertain backdrop for Bank of England officials as they prepare to announce their latest policy decision.
RICS’s survey showed that declines were most pronounced in the capital and the southeast, while prices picked up in Scotland and Northern Ireland.
In London, the property market has been roiled by tax changes and the UK’s decision to quit the European Union. Years of rampant price gains have also stretched affordability, putting off potential buyers.
A net balance of 65 percent of London agents reported falling prices last month, the weakest reading since the depths of the financial
crisis in early 2009.