House prices will rise by 3.3 per cent a year for the next five years, according to the Royal Institute of Chartered Surveyors (Rics)
House prices will rise by 3.3 per cent a year for the next five years, according to the Royal Institute of Chartered Surveyors (Rics), which says conditions in the market have “settled down” after the uncertainty of the Brexit vote.
Rics also says the number of properties being bought and sold in the UK dropped sharply after the EU referendum but has now stabilised, with confidence returning after the Bank of England’s economic interventions.
There is still a sharp division between London and the rest of the UK, however. For the sixth month running, more surveyors said prices were falling in the capital than said they were rising. Rics predicts that the London market will stay flat for the next 12 months.
The monthly report is one of the few that tries to predict the housing market. In a survey of its members, Rics said a higher proportion expect sales to rise over the next three months than have done since January.
Simon Rubinsohn, chief economist at Rics, was optimistic about the ‘Brexit effect’. He said: “There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum.
“Buyer enquiries did dip again in August but only modestly, and more significantly, sales expectations are beginning to edge upwards once again. It is likely the swift response from the Bank of England has played a role in helping to support confidence.”
At the start of the year, the group was anticipating four per cent annual growth for five years. That prediction was “before the UK voted to ditch its EU membership”, notes Sky News – though it was made with the referendum on the horizon.
Brian Murphy of the Mortgage Advice Bureau told the BBC that the new data from Rics was “in line” with other recent reports.
Yesterday Halifax said it believes the rate of increase in house prices is tailing off, prompting some commentators to announce that the Brexit vote has “chilled” the market. But Murphy says the Halifax and Rics data support a stable picture.
He told the BBC: “This is in line with other data released from lenders such as the Halifax, which supports the same point of view that after a deep intake of breath in June and allowing for the traditionally quieter summer hiatus, the overall market picture for most of the UK is stable, with the continued lack of supply being the underlying factor which is likely to underpin the market in the months to come.”