House prices in the UK will see a short-term drop over the next three months, according to a survey of property professionals. It is the first time since 2012 that chartered surveyors have predicted a fall in prices.
The Royal Institution of Chartered Surveyors’ (RICS) residential market survey also reveals that houses in central London are already falling. More than a third (35%) of property professionals reported a dip rather than a rise in prices in the capital in May 2016.
While the rest of the UK showed small price rises last month, RICS’ poll suggests that this trend is likely to end, with 10% more property professionals predicting that prices will fall rather than rise over the next three months.
RICS suggests that London and East Anglia would be the worst hit, with 43% and 33% of respondents saying that prices will fall over the next three months.
Buyer demand fell across the UK for the second consecutive month in May and at the fastest pace since 2008, with 33% more property professionals saying that demand decreased last month.
The survey also reveals that in the longer term, rents are expected to outpace house prices, with UK rents predicted to increase by 4.7% year-on-year over the next five years, compared to house price increases of 4.1%.
However, Simon Rubinsohn, chief economist of RICS, says that it is still a tough time for first-time buyers: “Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market.
“Instead, it appears to me that what we are looking at is a short-term drop caused by the uncertainty resulting from the forthcoming EU referendum, coupled by a slow-down following the rush to get into the market ahead of the tax change on the purchase of investment properties.”