RICS: House price growth set to slow

The Royal Institute of Chartered Surveyors (RICS) has revealed in its latest survey that the rate of house price inflation is set to slowdown in the coming months.

The survey suggests that uncertainty around the market is being fuelled by April’s change in Stamp Duty, the upcoming elections in Scotland, Wales and Northern Ireland and June’s referendum on Britain’s European Union membership, leading to a slowdown in the property market.

38% of London-based respondents expected to see prices in the capital drop over the next three months. Other parts of the country were more positive in their outlook, however, with those surveyors expecting to see prices continue to rise.

Looking at the long term, the survey suggests that prices are still expected to increase by 4% each year over the coming five year across England and Wales, given the strong demand outstripping the supply. It is expected properties in London will increase by 3% over the same period.

Simon Rubinsohn, RICS Chief Economist said the buy-to-let rush has “run its course” resulting in a slowdown in the market along with other “significant factors” affecting the short term confidence in the housing market.

He said: “Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May’s devolved elections are no exception. Likewise, the EU referendum, is likely to be an influencer in terms of the damper outlook for London in particular. However, all indications suggest that whatever the outcome of the forthcoming elections and referendum, in the long-term, the imbalance between demand and supply will still exert a strong influence on the market, with house prices expected to rise by close to 25% over the next five years.”

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