The Royal Institute of Chartered Surveyors (RICS) has reported that more of its members saw property prices rising in August compared to July, suggesting that fears of a property price crash following the EU referendum result may have been over-stated.
The one exception to the positive price news is London, where 30 per cent more RICS members saw prices continuing to fall, which makes August the sixth consecutive month the capital has seen prices on the decline, and leading one leading property commentator to suggest some London property owners are ‘panic selling’.
Property prices across almost all UK regions grew in August, continuing the trend in the country following the vote to leave the EU and against the fears of many property experts that a Brexit vote would cause chaos in the housing market. Rics said: “During August, 12% more respondents nationally reported an increase in prices, up from +5% in July.” Many investors appear to have held off making purchases in the market in June ahead of the referendum, with RICS stating that new enquiries “declined significantly” during this period. But the latest results indicate a return to positivity for most of the UK, and a continued strengthening of the investor market in regional hotspots such as Manchester.
London’s property market continued to suffer from negative sentiment though, continuing the trend seen ahead of the referendum. A combination of a lack of confidence in the capital’s property market following the vote, where commercial property has taken a serious dent after several property funds were suspended in the aftermath of the Leave vote, and a general trend for investors to seek better deals outside of the overheated London scene in the UK’s increasingly buoyant regions could be behind the downward pressure on London.
Doug Shephard, Director at UK Property website Home.co.uk, says, “It is clear that the referendum result certainly unnerved many investors. We will be keeping a particularly close eye on the London market over the next month, watching whether or not the surge in new listings becomes a stampede. This would inevitably lead to a home price crash in the region and stress mortgage lenders to the limit or beyond. Property investors would be well advised to weather the storm and not join a suicidal rush to market.”
The average time for a property to remain on the market in London has also increased from 68 days in July to 73 days in August, forcing some vendors who are keen on a quick sale to reduce prices and piling further pressure on the market.
Investors are increasingly being drawn to cities outside of London, such as Manchester where the UK’s highest yields are to be found, by the prospect of strong growth prospects in the longer term and a market where demand is increasingly outpacing supply.
