House price growth slows as activity falters

HOUSE price growth in Yorkshire and the Humber slowed down last month while key market indicators covering price expectations, buyer enquiries, agreed sales and new instructions all dropped.

According to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey, only 9% of Yorkshire & Humber’s agents saw a rise rather than a fall in prices during July.

Comparatively, UK house price growth posted the lowest survey reading in three years last month; just 5% more respondents nationally saw a rise rather than fall in prices. As price growth slows for now, only 11% of respondents in Yorkshire and Humber expect house prices to rise over the coming three months.

As activity falters, interest from new buyers in Yorkshire and Humber also continued to wane last month, whilst a lack of stock in the region’s housing market continues to cause ripples, with 39% more respondents to the survey having seen a fall in new instructions (homes coming on to the market).

Supply is at or around record lows in most parts of the UK, says RICS.

In line with the dip in demand and the worsening supply position, sales declined last month, with 23% more respondents in Yorkshire and the Humber reporting a drop in transactions.

Anecdotal reports provided by contributors to the survey suggest both the implementation of the tax surcharge on investment purchases and the uncertainty caused by the decision to leave the EU are contributing to the current mood in the market.

Simon Rubinsohn, RICS chief economist, said: “The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower the cost of mortgage finance. Against this backdrop, it is not altogether surprising that near term activity measures remain relatively flat.

“Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with RICS data showing inventories on agents books around historic lows on average. This is a long running story that may have been exacerbated by recent events but clearly needs urgent action from the new government.”