Johnson's decisive win won't result in UK housing market boom: report

London

THE UK's property market will not see a flurry of activity next year even in the wake of the Conservatives' decisive election win, the Royal Institution of Chartered Surveyors (RICS) said on Thursday.

House prices will likely rise just 2 per cent in 2020, RICS noted, echoing a similar prediction from property website-operator Rightmove.

British Prime Minister Boris Johnson's government must prioritise housing policy to "inject activity" into the market, after lower sales volumes across most regions in the past year.

"Challenges around affordability and low stock levels will continue to drag on the market, and Brexit uncertainty could resurface as the next deadline draws closer," said RICS economist Tarrant Parsons.

"Momentum across the UK housing market has remained relatively subdued, with new buyer demand showing little impetus going into the new year," the economist added.

Uncertainty surrounding the UK's exit from the European Union has seen a drag on prices and activity in recent years.

While Mr Johnson's Dec 12 election victory fuelled immediate optimism for a smooth departure, he has since announced plans to prevent Britain extending its transition period past the end of 2020, again raising the prospect of a disorderly transition.

A shortage of homes, meanwhile, has for years kept property ownership out of reach for many Britons, particularly in the capital, where values are double the national average.

There are tentative signs that growth is stabilising in London and house-price inflation could move out of negative territory there in the next six months, RICS said.

While the Conservative manifesto re-stated the government target of building 300,000 new homes per year, there is little evidence that progress is being made, the RICS report showed, and prospective homebuyers will probably continue to be faced with limited choices.

Figures from the Office for National Statistics published on Wednesday showed that house prices grew just 0.7 per cent in October, the lowest annual rate in more than seven years. BLOOMBERG