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RICS says UK housing market back on track - but London house prices will fall

Helen Cahill
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Spring Weather Finally Arrives In The UK
The Brexit vote caused many to worry that house prices would fall (Source: Getty)

Demand for housing is returning to the capital after a chilly period for the market both before and immediately after the EU referendum in June.

The Royal Institute of Chartered Surveyors (RICS) has said more chartered surveyors are reporting an increase in buyer enquiries, up for the first time since February.

Read more: This is how far London house prices fell in the third quarter

The net balance of surveyors who think demand has increased stands a three per cent, compared to minus 12 per cent in August.

The RICS survey is a lead indicator of the housing market, and although the respondents said demand is increasing, they still expect to see London house prices fall rather than rise over the next three months.

Nationally, however, the majority of surveyors expected house prices to increase.

Simon Rubinsohn, RICS chief economist, said: "The market does now appear to be settling down following the significant headwinds encountered through the spring and summer.

"Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock to the market.

Read more: This is how sterling's unstoppable slide will affect UK house prices

"Central London remains something of an outlier with contributors telling us this is the one part of the market where there may be further give on prices in the near term."

The survey from RICS comes after Knight Frank revealed that house prices in prime central London have fallen - with house prices down by as much as 10 per cent in Chelsea in September.

Christopher Ames, chartered surveyor and estate agent at Ames Belgravia, said:

Hopefully the Brexit timetable announced recently will assist market confidence.

The upper end of the market in London has not yet recovered since the December 2014 stamp duty land tax increase.

The extra three per cent for second homes from April 2016 is having an impact this year.

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