Fall in pace of house price growth
01-16-2015
By Press Association
The pace of house price growth fell to the weakest levels seen in more than a year and-a-half in December, surveyors have reported.
There were huge variations across the country, with Northern Ireland, Scotland and the North West of England seeing the strongest growth in property values, while London was the only region where more surveyors reported prices falling than rising, the Royal Institution of Chartered Surveyors (Rics) found.
But Rics said that with so little choice of homes on the market for house hunters, it seems "implausible" that property prices are set to show much of a dip.
Eleven per cent more surveyors said December house prices generally increased rather than decreased
It said that if demand from potential buyers starts to pick up from its current sluggish levels, the increased competition for the few properties on the market that this causes could rapidly result in an upswing in property prices.
Across the UK, net balance of 11% more surveyors observed house prices generally increasing rather than decreasing in December, marking the weakest pace of price growth that Rics has recorded since May 2013.
London saw rapid property price growth in early 2014, but in December, an overall balance of 36% of surveyors in the capital reported values falling rather than rising.
Northern Ireland, where values have been recovering more slowly towards the levels seen before the financial downturn, saw the strongest price growth in December. A balance of 65% more surveyors there reported prices rising rather than falling.
Scotland showed the second strongest upswing in prices in December, with a balance of 45% more surveyors there reporting price rises. Regions in northern England also showed relatively strong price growth in December, with 34% more surveyors in the North West reporting prices increasing and 23% more surveyors in the North reporting rising values.
In Wales, a balance of 6% of surveyors saw prices increase rather than decrease in December, while in the East and West Midlands this figure was 9%, in the South West it was 16% and in the South East it was 24%.
Rics said that the number of new house hunters entering the market has been falling for six months in a row. Meanwhile, the number of properties on the market for them to choose from is "close to historic lows", it said, with the volume of new properties being listed having fallen for 10 out of the last 12 months.
Simon Rubinsohn, Rics' chief economist, said: "There is a risk that with so little housing available, any pick-up in demand could rapidly feed through into higher prices rather than higher sales."
Housing market experts have predicted that the reforms to stamp duty which were unveiled by the Government in December could prompt more people to buy and sell homes in the coming months, as for the majority of people who pay stamp duty, the cost will be lower than it was under the old system. But people buying the most expensive properties, many of which are situated in London, will pay more under the new stamp duty system.
Rics said there is general optimism among its members that the stamp duty reforms will deliver a 2-5% boost in both house sales and house prices over the next 12 months, although surveyors in London expect to see sales decrease by 5-10% and prices fall by 2-5% as a result of the changes.
Mr Rubinsohn said that as well as increased signs of buyer caution generally, responses to its latest survey suggest that a mood of uncertainty caused by the approaching general election also appears to be contributing to the recent softening in the housing market.
But he added that with the number of properties coming to market having remained flat for most of the last year, "it seems implausible that the dip in demand will result in very much of a decline in house prices".