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UK house buyers lose interest as weak supply represses market
[LONDON] Interest from UK house buyers slipped to a five-month low in January amid waning affordability and a diminishing supply of properties for sale.
The Royal Institution of Chartered Surveyors said its measure of new buyer inquiries fell to 5 per cent from 6 per cent a month earlier. That came as instructions from sellers also declined, remaining in negative territory for an 11th month.
The survey's headline price index rose to 25 from 23 in December, with values expected to increase over the coming year in all regions except central London. The outlook for sales also gained, with the 12-month outlook reaching a one-year high.
While the national housing market has remained resilient since Britain's June vote to leave the European Union, economists and lenders expect price inflation to cool in 2017. Last year's underperformance in London, sparked by Brexit and tax changes for some homes, continued in January with the capital's price index falling for a second month.
The government said this week it would force local councils in England to set out how they'll build more houses in an effort to increase supply and push down prices that make home ownership prohibitively expensive for many young people. Communities Secretary Sajid Javid said values have surged and action is needed.
"The medium term view of Rics professionals working up and down the country is that both house prices and rents will over the medium term continue to grow at a faster pace than wages putting even greater pressure on affordability," said Simon Rubinsohn, Rics chief economist.