UK house prices: Demand for homes, house prices and enquiries from new buyers in London fell in May

Shruti Tripathi Chopra
Follow Shruti
Average House Price In The UK Rises 8% In The Year
New buyer enquiries fell in May after remaining stagnant over the past eight months (Source: Getty)

Buyers and sellers in the capital adopted a "wait and see" approach in May due to the General Election, according to the latest residential market analysis by the Royal Institution of Chartered Surveyors (Rics).

Demand for homes, house prices and enquiries from new buyers in London declined in May while new instructions from those wanting to sell were also flat in the capital, the study found.

Last month, one per cent more respondents cited a decline in fresh listings compared to those reporting a rise.

Meanwhile, new buyer enquiries fell after remaining stagnant over the past eight months.

Agreed sales in the capital continued to decline for the third consecutive month with 23 per cent more respondents seeing a fall.

Read more: UK house prices in second quarterly decline since November 2012

Respondents expect house price inflation to stand at 3.5 per cent per annum in the capital in the next five years, Rics said.

Simon Rubinsohn, Rics' chief economist, said: “Although the latest survey suggests that uncertainty related to the General Election may have contributed to what appears to have been a disappointing level of transactions in the housing market over the spring, perhaps the most ominous signal emanating from the data released today is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first time buyers are clearly having in taking their first steps onto the property ladder.

“The increasingly tight second hand market remains a cause for concern with the Rics series tracking new instructions to agents recording its fifteenth successive negative reading. It is hard to see this as anything other a major obstacle to the efficient functioning of the housing market.”

Read more: House prices have fallen for three months for the first time since 2009

Brian Murphy, head of lending at Mortgage Advice Bureau, said: "Given the context of recent political developments and the ‘double whammy’ of Article 50 being triggered followed by a snap Election being called, there will always be the ‘wait and see’ contingent – both in terms of buyers and sellers – and it might be reasonable to suggest that, in line with activity which has been observed in other election years, we could well see a pick-up in housing market activity post 9 June.

"Certainly, this would also appear to be the view of many respondents to the RICS survey, with over a quarter expecting to see an increase in activity in the second half of 2017."

Related articles