A new report from the Royal Institution of Chartered Surveyors (RICS) reveals that house prices will remain stagnant in 2019.
Research and rating firms have warned that the market could enter its third year of decline as sales volumes are expected to fall by about 5% and home price growth stagnates.
RICS economist Tarrant Parsons said uncertainty around Brexit was causing “additional hesitation” in the property market.
“However, the current political environment is not the only impediment to activity, as inventory shortages continue to leave buyers with limited options, while affordability has reached its limit and many people are lowering prices.”
“These combined headwinds are unlikely to subside over the next year, and volumes may decline slightly.”
“Against this backdrop, house price growth at a UK level is likely to lose further momentum, although a negative trend is likely to be avoided on the back of supply shortages and a still strong labor market,” he said. .
Following the Bank of England’s suggestion that a disorderly exit from the EU could lead to a 30% plunge in house prices, Mr Rix said this prediction was unrealistic.
“Some of the assumptions behind the disorderly Brexit scenario seem implausible to us, primarily the possibility that the central bank could cut interest rates and resume quantitative easing in the wake of a no-deal Brexit. “We expect that there will be a strong correlation between the two,” the group said.
Amid Brexit uncertainty, JLL is more optimistic than Rix, predicting that a weak start to the year will lead to 1% growth in the first half of the year, followed by 1.5% growth in the second half. said. year. This growth rate is expected to jump to 11% over the next five years.
