House prices are likely to continue falling for another six months in the UK and for the whole of 2019 in London and the south-east, according to an industry survey.
Separate official data shows that rents are also falling, with tenants typically paying £757 a month, down from £772 a year ago, continuing a pattern of declines that began after the Brexit vote in 2016.
The Royal Institution of Chartered Surveyors (RICS) said that its March poll of surveyors found a subdued picture across the UK, with sales weak and an eighth successive month of falling inquiries from buyers.
The average time it takes to sell a property remains unchanged at 19 weeks, the joint longest period since the RICS started recording the data in 2017. It added that it takes longest to sell a home in the south-east of England, at 21.5 weeks on average.
The moribund market is deterring potential sellers from putting their homes on the market. The RICS said: “The ongoing decline in new instructions being listed for sale has intensified of late.”
The surveyors’ body does not record house prices, but instead gives a net positive or negative balance about where surveyors reckon prices are heading. “The survey’s headline price net balance came in at -24%, from -27% previously,” said the RICS.
It added that the indicators are “pointing to a modest fall in house prices at the national level over the next couple of quarters … London and the south-east are the only areas where contributors expect prices to continue falling over the year ahead”.
Several surveyors cited by the RICS across the UK said Brexit was a significant factor behind the price falls. In Derby, Steve Gadsby of Gadsby Nichols said: “Brexit is still the main issue causing market uncertainty. This is particularly relevant to mid and higher priced properties where purchasers seem to be awaiting a Brexit outcome before commitment.”
Rents appear to be following the same path as house prices, with tenants about £20 a month better off on average since the Brexit vote.
The Deposit Protection Service, one of the government-approved bodies that has taken care of tenants’ deposits since 2012 and is one of the few official sources of data on rents, said that rents have fallen to their lowest level in three years.
It said the average UK rent fell to £757 during the first quarter of 2019, with tenants paying £5 (0.64%) less than the previous quarter and more than £14 (1.87%) less than a year earlier.
The biggest falls in rent have been in south-east England, where average rent has dropped from £879 to £854 over the past year. “With rents generally falling, and average wage growth above inflation, this is positive news for renters concerned about affordability,” said the Deposit Protection Scheme.