Further housing market speculation

Having initially shrugged off the uncertainties provided by the result of the EU referendum last year, the housing market had a wobble over the summer.

The Halifax house price index showed that overall prices fell by 1% in June in the biggest monthly dip since January. That report was followed in short order by the RICS UK Residential Market Survey, which showed that growth had slowed significantly across the south of the UK – typically the country’s strongest markets – and that there had been a dip in both new buyer enquiries and new instructions.

The news prompted Savills to review its forecasts for the rest of 2017. At the start of the year the agent was predicting minimal price growth but is now expecting prices to flatline on average. The company’s head of residential research Lucian Cook told Property Week: “We’re talking about zero price growth now. Whether you’re above or below the line depends on sentiment and that depends on the news agenda.”

Few commentators are expecting a crash in house prices, with the mismatch between supply and demand in the market meaning that the most likely scenario is either prices flatlining for a period or some modest correction. Given the high degree of political instability currently facing the UK, however, forecasts may well need to be revised once again in the near future.