UK house price growth still slow

The UK housing market is continuing to show signs of slowing down, according to the latest monthly survey from the Royal Institution of Chartered Surveyors (RICS).

The surveyors? group said on Thursday that house price growth posted the lowest survey reading in three years in July, and key indicators covering price expectations, buyer enquiries, agreed sales and new instructions all remained firmly negative.

Across the UK, just 5% more respondents saw a rise rather than fall in prices. In London the survey showed a net balance of -33%, reflecting an outright drop in prices in the capital.

With price growth slowing, near term price expectations across the UK were negative for the third month in a row. In the survey 12% more respondents predicted a decline in house prices over the next three months.

RICS highlighted the need for more houses to come onto the market, with supply at or around record lows in most parts of the UK.

Interest from new buyers has also decreased, and as a result sales declined sharply in July. Across the UK, 34% more respondents reported a fall in transactions, with the monthly pace of decline in both July and June the fastest seen since 2008.

This trend began in April, when the government introduced a tax surcharge on investment purchases.

?Anecdotal reports provided by contributors to the survey suggest both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market,? the organisation said.

However, conditions vary between agents: many reported that activity has returned to normal after an initial wobble, while others believe Brexit has only had a very modest or negligible impact.

Looking ahead, RICS noted that 12-month indicators for both sales and price expectations return to positive territory, albeit at a modest level and well down on the numbers recorded through 2015 and the early part of this year. This suggests that ?confidence remains more resilient than might have been anticipated?, RICS commented.

The organisation concluded by emphasising the continuing shortage of supply in the UK housing market and calling for ?urgent action? from the government.

?We need a coherent and coordinated strategy from government that builds on previous plans, and includes strategy for a functional private rented sector as an important part of the housing mix,? said Jeremy Blackburn, RICS head of UK policy.