Political uncertainty held back London house prices in November, a new survey has shown, with gauges of demand and sales stuck in negative territory.
Property company owners are hoping that today’s General Election will provide a clearer political and economic picture that could boost the struggling market. Falling prices have lessened London’s affordability problems, however.
London house prices were subdued in November, with the Royal Institution of Chartered Surveyors’s (Rics) gauge coming in at minus 33, compared to minus 22 in October. This means far more respondents reported price falls than price increases.
Buyer inquiries in the capital fell last month, with the reading of minus 11 down from 21 in October. Newly-agreed sales in London remained flat. The reading of minus five was up marginally from minus six in October.
Rics member Scott Chapman of Selectsurv said: “The uncertainty around Brexit continues to have a negative effect on the market, and this is likely to be even more noticeable as we approach the end of the year.”
Jeremy Leaf, north London estate agent and a former Rics residential chairman, added: “New buyer enquiries and listings [are] lower than last month but not falling as quickly as previously, despite significant political and seasonal distractions.
“What we have also noticed, which is unlikely to be picked up by national surveys for a while, is the quiet determination of increasing numbers of realistic buyers and sellers to take advantage of improved affordability and a little more confidence in market prospects for 2020.”
In London’s huge rental sector, the gauge of new rental stock coming to market in London in November was at its lowest reading since 1998. Chapman said: “On the back of this, rents are expected to flatline in the coming three months.”
Buyers and sellers were also cautious across the rest of the UK, Rics said. Key metrics capturing buyer demand and sales remained in negative territory in November.
New buyer enquiries reportedly fell for the second month in succession, the survey showed.
Simon Rubinsohn, Rics chief economist, said: “Confidence is critical to a well-functioning housing market and whatever happens in the general election today, it is important that the new government provides reassurance.”
After the election, survey respondents were hopeful things would pick up across the UK over the next three months with the optimism gauge edging up to 11.
However, Rics said: “Looking ahead, near term price expectations are broadly flat for the country as a whole.”