Brexit uncertainty is continuing to be felt in the housing market in Wales, with surveyors expecting prices and sales to edge lower in the three months ahead, according to the latest RICS (Royal Institution of Chartered Surveyors) Residential Market Survey.
Whilst the headline price balance moved back into positive territory, having been flat in October’s survey, it is the third month in a row that Welsh surveyors have indicated that they expect prices and sales activity to fall or be flat.
It is also the fifth month in a row that respondents in Wales have reported lower levels of new buyer enquiries compared to the previous month.
Anecdotally, respondents to the survey have been indicating that this has been linked to nervousness related to the economic climate and Brexit.
RICS Residential Spokesperson for Wales, and Director of Kelvin Francis, Cardiff, Tony Filice FRICS, says:
“At this time of year activity usually slows, and we are seeing that being reflected in viewings, albeit that the number of valuations has increased. Overall, there continues to be some nervousness with regard to the economic climate, which will likely continue into early next year.”
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 UK 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. Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon. The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis.”
Hew Edgar, RICS Head of Policy commented:
“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 continuingly 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.”
The main findings of the latest survey for Wales were as follows:
The headline price balance for Wales was +18% in the latest survey, pointing to house prices having risen.
The price expectations balance, at -5%, suggests that prices will fall in the three months ahead. The sales expectations balance was at -1%.
The new instructions to sell balance was at -3%, suggesting that the number of new properties coming onto the market was lower in November.
Meanwhile, the newly agreed sales balance was at 11% suggesting that the number of newly agree sales rose. New buyer enquiries declined, according to the net balance (-22%) of respondents in Wales.