Pessimism About U.K. Housing Is at Its Worst in Two Decades
(Bloomberg) -- The gloom gripping the U.K. housing market deepened in December, with real-estate agents reporting falling prices and optimism at its lowest ebb in two decades.
The Royal Institution of Chartered Surveyors blamed Brexit uncertainty and a lack of housing supply for the malaise revealed in its latest monthly survey published Thursday. The downbeat assessment came as the Bank of England reported a slump in mortgage demand at the end of last year.
Near-term sales expectations fell to their lowest since RICS records began in 1999 and an index of prices slid deeper into negative territory to its worst level since the eurozone sovereign-debt crisis.
The 12-month sales outlook was slightly more upbeat, suggesting uncertainty surrounding what form of departure the U.K. will make from the European Union in March is playing a significant role.
“It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued,” said RICS Chief Economist Simon Rubinsohn. “This is also very clearly reflected in a worsening trend in near-term sales expectations.”
The U.K.-wide figures do mask some regional differences, RICS said. Prices are anticipated to either rise or hold steady across the country, apart from in London and the southeast.
In its latest Credit Conditions Survey, the BOE said demand for home loans fell “significantly” in the three months through November and a further decline is expected.
The London property market has been particularly badly affected by the uncertainty surrounding Britain’s split from its largest trading partner. Prime Minister Theresa May’s proposed withdrawal agreement was struck down in Parliament this week, leaving the government in disarray.
The turmoil has left agents across the country begging for clarity.
“Please resolve Brexit to restore confidence,” implored Christopher Jowett, from Jowett Chartered Surveyors and Estate Agents in Huddersfield. John Haigh, of Lister Haigh (Yorkshire) simply said “Oh for an end to Brexit uncertainty.”
Here’s a round-up of other agents’ comments in the RICS survey:
Kevin Ryan, Carter Jonas, in London:
“A quiet December in terms of sales activity. In addition, previously arranged sales wobbling.”
Richard Powell, Ryder & Dutton, in the northwest:
“The continuing Brexit uncertainty is a real drag on the property market.”
Tom Dogger, B N Investment, in London:
“With the chaos of Brexit continuing to dampen confidence and exacerbating falling prices, combined with a weak currency, will the foreign investor return?”
Richard Going, Farrar & Co in Chelsea, in London:
“Brexit, Stamp Duty Land Tax, potential extra 1 percent for international buyers, market confidence non-existent.”
Not everyone is staying away from the housing market, however. First-time buyers, now enjoying some of the most competitive deals in years, completed 36,200 mortgages in November, almost 6 percent more than a year earlier, UK Finance said Thursday.
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