House prices are continuing to fall in London, according to the April 2018 RICS UK Residential Market Survey.
While sales and new buyers appeared to stabilise in April, after seeing declines in previous months, 65% of respondents in London reported falls in the latest results, the largest reading since February 2009.
Falling prices were still also being reported in the South East in April, and also in the South West for the first time since May 2013.
However, house prices continue to rise in Northern Ireland and Scotland.
Further out, prices are predicted to continue to decline over the year ahead in London with 20% more respondents expecting prices to decrease in a year’s time.
As prices decline further, new instructions had a second consecutive month of rises, with 11% more respondents noting an increase (rather than decrease) of properties coming on to the market, according to the report.
The survey found new buyer enquiries were flat, arresting a sequence of twelve straight months of declines in London. As with buyer demand, agreed sales also held relatively steady in April, in London, having fallen back over the last thirteen months, with 10% more contributors citing an increase.
Going forward, the RICS report shows near term sales expectations point to slight rises for transactions in London (net balance of +12%). At the 12-month horizon, expectations display similarities to the near term outlook, with a net balance of +14% of respondents expecting sales to rise over this time frame.
In the lettings market, tenant demand in the three months to April rose slightly, the first reported quarterly rise since January 2016 in the capital). Alongside this, it was reported by contributors that landlord instructions fell from February to April. Although tenant demand showed tentative signs of recovery in the latest result, rents are still expected to fall slightly in the near term.
Simon Rubinsohn, RICS chief economist said: “The housing market typically tends to see a pick-up in activity at around this time of the year and the feedback from respondents to the latest survey does seem to be capturing this tone. However, once this seasonal pattern has been allowed for, the underlying trend in transactions still remains broadly flat.
“Meanwhile, the impact of recent tax changes appears increasingly visible in the letting results with new instructions from landlords in the three months to end April falling again and at a faster pace than previously. Given what this says about the Buy to Let market at the present time, it is imperative that Build to Rent begins to take on a greater role to ensure those seeking to rent in private sector over the coming years have sufficient choice.”
Simon Aldous of Savills, London, said: “In central London the market remains very price sensitive, especially at the high end. Transaction levels are down in this market especially between £5m to £20m.”
Robert Green of John D Wood & Co, Chelsea, added: “April was a very good month for sales agreed across central London, with our pipeline doubling since Easter for the central region. Realistic vendors and buyers, who at last seem keen to transact.”