A third of surveyors say London prices fell in the last month

Christina Hoghton
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Christina Hoghton

Uncertainty over the EU Referendum is leading to a predicted fall in UK house prices

House prices in central London are falling, with 35% of property surveyors in the capital reporting a drop in prices in the past month, according to the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS).

And 10% of respondents reckon that average UK prices are set to fall over the next three months, the first time a drop in prices has been predicted by the RICS survey in four years.

London is expected to be worst hit, with 43% of respondents saying that prices will fall over the next quarter, followed by East Anglia, with 33% predicting a drop there.

Simon Rubinsohn, chief economist at the RICS, said the key theme in house prices going forward was “uncertainty”.

“It’s evident both on the demand side – our new buyer enquiries series has now fallen for two months in succession – and on the supplier side, new instructions coming on to agents’ books has resumed their downward course after a little blip upwards in the early part of the year,” said Rubinsohn.

“The impact on the wider market is still relatively modest.

“If you look at national figures, agreed sales were slightly down in May but generally remaining reasonably firm.

“The central London market is now clearly the weak spot across the country with sales dipping.”

He said that RICS near-term indicators are pointing to numbers for the wider market flatlining over the summer, with London remaining a weak spot for a few months to come.

Rubinsohn said that it was unlikely that a more affordable market will emerge in the near future.

“Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market. Instead, it appears to me that what we are looking at is a short-term drop caused by the uncertainty resulting from the forthcoming EU Referendum coupled by a slow-down following the rush to get into the market ahead of the tax change on the purchase of investment properties,” he said.