House prices in the UK are set to decline this year after the Office for Budget Responsibility (OBR) slashed its forecast, while the Royal Institute of Chartered Surveyors’ (RICS) revealed that Brexit was stunting sales.
The OBR yesterday cut its five-year house price forecast from 20 per cent to 17 per cent growth, while also predicting that annual house price inflation will fall below zero in 2019, below its October forecast of 3 to 4 per cent growth.
Furthermore, the office projected that house prices would bounce back to the usual annual growth rate of 4 per cent by 2024.
The latest RICS housing market survey highlighted that new buyer enquiries and agreed sales had fallen for the sixth consecutive month, while 77 per cent of the survey’s respondents cited Brexit uncertainty as the primary reason for the stagnation in sales activity.
Commenting, RICS chief economist Simon Robinsohn said: “Although activity in the housing market continues to be weighted down by the lack of available stock, changes in the tax regime affecting property, and affordability; feedback to the latest RICS survey makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers. And with little sign that the issue will be resolved anytime soon, it could prove to be a challenging spring for the housing market and the wider economy.
"It is clear from professionals working in the market that this environment requires a greater degree of realism from those looking to move. A reluctance from some vendors to acknowledge the shift in the balance of power in the market will compound the difficulty in executing transactions."
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