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UK surveyors see weakest residential price outlook since Brexit vote

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Bank of England governor Mark Carney reiterated that the BoE had tested banks against "very severe" scenarios including "dramatic house price falls". Britain's housing market overall has slowed since the Brexit vote in June 2016.

London

BRITISH surveyors are the most downbeat about house prices since the Brexit vote in 2016 with some unsettled by reports that Bank of England governor Mark Carney warned ministers of a possible house price crash if Britain leaves the European Union (EU) with no deal.

The Royal Institution of Chartered Surveyors (RICS) said its headline house price balance fell to a four-month low of -2 in September, below all forecasts in a Reuters poll.

The outlook for prices in three and 12 months' time was the lowest since June 2016.

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"Uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England (BoE) governor to the cabinet," RICS' chief economist, Simon Rubinsohn, said.

Last month, British media reported that Mr Carney privately told ministers that mortgage rates could spiral and house prices fall by 35 per cent over three years in a chaotic no-deal Brexit.

The BoE declined to comment on the remarks and whether Mr Carney had been referring to extreme financial scenarios used for previous BoE tests of banks' financial health.

Mr Carney himself did not address the reports in a public appearance on the day they appeared, but reiterated that the BoE had tested banks against "very severe" scenarios including "dramatic house price falls". Britain's housing market overall has slowed since the Brexit vote in June 2016.

Official data for July showed prices up 3 per cent on the year, compared to gains of around 8 per cent at the time of the historic referendum.

The headline figure masks big regional variations. Prices are falling in London, which saw the biggest rises before the Brexit vote.

The city is vulnerable to Brexit worries among foreign investors and any barriers to financial services trade. By contrast, RICS said prices continued to rise in most of the UK outside London and neighbouring areas. Sales were slow almost everywhere, however. New buyer enquiries were the weakest since March and houses were taking the longest to sell since RICS started asking its members about this regularly in February 2017. REUTERS