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Thursday, July 14, 2016

RICS do their best to calm property prices

Following the great and unwashed of Britain calling for Brexit the RICS UK Residential Market Survey for June 2016 reflects the mass uncertainty.

Nobody really has a clue as to what's going to happen next, (none more so than the leaders of the Brexit campaign).

It's left both property sellers and buyers in a spin, like chickens wondering if now is quite the right time to be crossing the road.

Nobody wants to buy a property, only to find that it's dropped 10% before they've finished unwrapping their salad bowls.

The RICS have done their best to calm nerves Their guess work is clearly designed to look as if whilst acknowledging the risk of a short-term drop, some back-stroking for buyers regards longer-term values, might be enough reassurance.

However, realistically, I'm picturing there's been a lot of coin tossing going on in agent's back offices up and down the land.

Key points from the RICS survey -

  • Buyer enquiries down for the third month in a row - now lowest since 2008
  • A sharp fall in agreed sales - further short term drops predicted
  • 12 month price falls predicted for London and East
  • Longer term outlook positive

Drop in supply and demand

Increasing numbers of agents are reporting steep falls in both new buyer enquiries and supply of properties for sale.

Agent predictions in the short term ( 3 months )

Agents are predicting a further drop in sales activity over the coming three months, with agents giving their most negative short-term outlook since 1998.

Although the Brexit fall out doesn't appear to have hit prices yet, with London the only region where agents are reporting actual price falls.

That said, in the short term agents are increasingly predicting price falls in the short term (next 3 months ).

Agent predictions in the mid term ( 1 year )

Agents predict over the next 12 months the dip in prices is only expected to persist in London and East Anglia and longer term.

Agent predictions in the long term ( 5 years )

Prices are still expected to rise, although at a slower rate than previously anticipated. A cumulative increase of 14% on property prices projected over the course of the next five years.

Rents predictions

Agents are predicting rents to remain resilient.

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