A gauge of UK house prices fell for the first time in five months in December as the supply of properties for sale remained weak and values slumped in London.
The Royal Institution of Chartered Surveyors said its index declined to 24 from 29 in November, indicating that a smaller majority of respondents saw price gains. Predicted sales over the next three months also slowed, with only 4 per cent more respondents anticipating an increase. However, the year-ahead sales outlook still rose slightly.
While the national housing market has continued to strengthen since the June vote to leave the European Union, economists expect prices to cool this year. London’s underperformance, particularly among the city’s most expensive properties, was a theme of 2016 after Brexit and tax changes for some homes.
“A familiar story relating to supply continues to drive both the sales and lettings markets, impacting on activity, prices and rents,” said Simon Rubinsohn, RICS’s chief economist. “The latest RICS survey provides further evidence that both price and rent pressures are continuing to spread from the more highly valued to more modestly valued parts of the market, for good or ill.”
London was the only part of Britain to post falling prices, with values sliding for a 10th consecutive month, according to the RICS survey. Respondents in all areas of the UK said they expect to see prices rise over the year ahead, albeit a more subdued increase in the capital.