Home buyers and sellers sitting tight amid Brexit uncertainty, say surveyors

Uncertainty over Brexit is prompting home buyers and sellers to sit tight in increasing numbers, with fewer people interested in moving and properties now typically taking around four months to sell, according to surveyors.

The number of people looking for a new home fell in November, with a net balance of 21% of surveyors reporting house hunter numbers falling rather than rising, the Royal Institution of Chartered Surveyors (Rics) found.

Many comments attributed the drop-off in buyer numbers to Brexit uncertainty as well as a continued limited choice of properties for sale, Rics said.

It now takes 19 weeks on average for a property to sell after initially being listed, the longest duration seen since this aspect of the survey started in February 2017 and “another sign of challenges in the sales market”, Rics said.

House prices are slipping back, despite the limited number of homes for buyers to choose from.

But Rics said the regional picture remains varied, with house prices falling most notably in London, South East and East Anglia while house prices in the South West, East Midlands and North East are broadly flat.

House price increases are still being seen in Northern Ireland, Scotland, the West Midlands, Wales, Yorkshire and the Humber and the North West.

In general, the number of new properties being listed for sale fell for the fifth month in a row in November.

A net balance of 24% of surveyors reported seeing a fall rather than an increase in new properties coming on the market, marking the fastest pace of decline seen in more than two years.

The lack of new homes up for sale is impacting estate agents’ average stock levels.

Estate agents now have around 42 homes for sale per branch on average.

Rics said that “with little choice for new buyers and fewer people interested in moving”, the number of agreed sales taking place also fell in November, with a net balance of 15% of surveyors seeing sales falling rather than increasing.

In the lettings market, demand from prospective tenants is holding broadly steady, but the number of new homes coming up for rent continues to fall, signalling a continued decline in the supply of fresh rental stock.

As a result, rents are expected to rise modestly in the coming months, Rics said.

Rents are expected to outpace house price growth over the next five years, Rics said.

On average, rents are expected to rise by 3.1% per year over the next five years, while house price growth projections stand at 2.3% on the same basis.

Simon Rubinsohn, Rics chief economist said: “It is evident from the feedback to the latest Rics survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market.

“Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.

“Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line.”

Mr Rubinsohn highlighted the risk of political machinations having an impact on the housing development sector “making it even harder to secure the uplift in the building pipeline to address the housing crisis”.

Hew Edgar, Rics head of policy said: “Rics shares the resounding sentiment of frustration from our professionals operating in the UK’s residential sector; and we are not surprised by this month’s outcome.

“Brexit was always going to be a very politically charged debate, but the current style of politics and continuing level of political uncertainty is significantly impacting the housing market and built environment.

“Prior to the referendum, our research indicated that Brexit would only impact the higher end of the residential market, as the lower and middle market areas are domestically driven.

“Now, however, it appears that those looking to buy and sell homes across the price spectrum, as well as those looking to invest in the UK’s residential sector, are putting off decisions until there is more certainty.

“Parliamentarians need to work together to make sure politics, the future deal and our relationship with the EU works for the built environment.”