House prices forecast to fall for the first time since 2012

House prices are set to drop, as demand for property falls at its fastest rate in eight years.

Members of the Royal Institution of Chartered Surveyors (RICS), are predicting a short-term drop in UK house prices over the next three months. This is the first fall in house prices in more than six years.

Surveyors expecting prices to drop, outnumbered those expecting prices to rise by a majority of 10%.

The members who work in estate agents said London and East Anglia would be most affected.

However prices in Wales, Northern Ireland, the Midlands and the North are expected to rise.

Price momentum and buyer demand have contracted and that is partly down to uncertainty surrounding the referendum on EU membership. Another factor was said to be the recent rush to buy, after stamp duty was introduced to landlords purchasing property.

The dip in house prices will come at the same time as rents continue to rise, according to RICS.

Simon Rubinsohn, RICS Chief Economist said: “What we are looking at is a short term drop caused by the uncertainty resulting from the forthcoming EU referendum, coupled by a slow-down following the rush to get into the market ahead of the tax change on the purchase of investment properties.

“Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market.”

The survey also suggests that the number of properties coming on to the market is at a record low.

Surveyors who saw fewer new instructions last month outnumbered those who saw more instructions by 30%.

That is the largest figure since the current survey began in 1999.

 

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