Brexit Batters U.K. Housing as RICS Index Worst in Six Years

(Bloomberg) -- A key gauge of the U.K. housing market fell to the weakest since just after the financial crisis.

The Royal Institution of Chartered Surveyors said its index of prices fell to the lowest in six years in October, pointing to a modest drop in values. Uncertainty about the U.K.’s impending exit from the European Union and a lack of new buyers have battered the market, RICS said on Thursday.

Brexit Batters U.K. Housing as RICS Index Worst in Six Years

The report follows others from Halifax and Nationwide Building Society showing slower house-price growth, though home ownership remains out of reach for many after a three-decade property boom. Brexit has further clouded the outlook as potential purchasers stay on the sidelines awaiting clarity on the U.K.’s divorce from the EU on March 29.

“Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment,” said Simon Rubinsohn, RICS chief economist. While prices remain more resilient in some parts of the country, negative news about the overall market primarily stems from the south and east of England, he said.

Respondents to the RICS survey were “doubtful” that U.K. sales momentum will pick-up over the coming months, as prices, demand and supply all decline. Here’s a roundup of some London agents’ views in the RICS survey:

Allan Fuller, Allan Fuller Estate Agents:

“The final quarter of the year traditionally sees a slowdown in sales, this year was more so due to Brexit uncertainty, some vendors switching to letting rather than take a drop on price.”

Ben Temple, Regent Property:

“The sales market is tough and only cheap properties get buyers interested.”

J.J. KING, Andrew Scott Robertson:

“Having reported more sales last month, the rate of fall-throughs has risen. Purchasers appear spooked, any form of negativity slows down sales. Negotiators are working very hard to retain sales.”

James Gubbins, Dauntons:

“The post-summer buyer activity has cooled. More and more buyers are saying they will delay a purchase until they know what the Brexit strategy is to be.”