House prices are still on the rise and demand for rental properties is also up around the UK despite uncertainty over Brexit, according to the Royal Institute of Chartered Surveyors.
The RICS’ UK Residential Market Survey for September shows some wide variations in results from region to region.
House prices in London continued to show the steepest decline, on a regional comparison, while figures for the south-east of England and East Anglia are still declining. But, by contrast, prices around much of the rest of the UK rose solidly with the West Midlands, Northern Ireland and Scotland the best-performing regions.
That trend is also reflected in an expectation that they will continue to rise over the next 12 months, especially in the north-west of England and Northern Ireland, although this expectation is not shared by RICS members from London and the south-east.
Rents and need for rental properties on the up
Demand for rental properties rose across the UK for the fourth month in a row, although instructions to let declined again, showing that the supply is falling short of demand in the market.
Rents are expected to rise by 2% over the next year, and by an estimated 3.5% between now and 2023.
Brexit: Opinions vary around the country
The effects of Brexit also showed up in an array of comments included in the survey. One respondent, from the south-east, said, “Longer term very hard to predict given Brexit uncertainties”, while another declared “Mercifully, the North-East has not caught ‘Brexititis’”.
“There are a number of themes running through the comments of respondents this month,” said RIBS Chief Economist Simon Rubinsohn. “Uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet.
“This is not surprisingly taking its toll on the sales market with the key activity indicator in the survey flat or slightly negative in all parts of the country apart from Northern Ireland and Wales.
“That said, the recent announcement from the Prime Minister that the Housing Revenue Account borrowing cap will be abolished is a bold move which over the time could help address some of the very real challenges facing those looking to buy or rent property.
“There is no silver bullet that will immediately resolve this problem but encouraging new entrants to deliver affordable homes is certainly part of the answer.”