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Housing market sluggish as London price contagion spreads to the South East

A combination of low stock and ongoing political and economic uncertainty is dragging on the UK housing market, as a downturn in parts of London’s market look to be spreading to other parts of the South East.

According to the Royal Institute of Chartered Surveyors’ (RISC) residential market survey for July, only 1% of surveyors reported price rises last month, down from 7% and sitting at its lowest total since early 2013.

Dragging down the figures was the continued decline in the capital’s housing market which posted negative figures in line with the declines of the previous three months, according to RISC.

The survey also hinted that surveyors were now seeing similar declines spread to part of the South East of England with the region’s price balance dropping into negative territory, making it the weakest month since 2011.

Simon Rubinsohn, chief economist at RISC said that the most ‘worrying’ aspect of the figures were that the sluggishness in the market could potentially continue for the foreseeable future.

He said: “Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come.

“One reason for this is the recent series of tax changes, but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market.

“And there are some very real consequences for the economy from all of this including the impact on the ability of people to be mobile when looking for work.”

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