The growth in UK house prices continued to slow in July, as the market posted its lowest reading for three years, according to the latest RICS UK Residential Market Survey.
Key indicators covering price expectations, buyer enquiries, agreed sales and new instructions all remained firmly negative, the Royal Institution of Chartered Surveyors said.
RICS said just 5% more respondents nationally saw a rise rather than fall in prices, a downward trend evident across the UK.
Simon Rubinsohn, RICS chief economist, said the housing market is currently “balancing a raft of somewhat mixed economic news, alongside Bank of England policy measures, which have already begun to lower cost of mortgage finance”.
“It is not altogether surprising that near-term activity measures remain relatively flat,” he said.
However, he said, a rebound in key 12-month indicators in the July survey suggest confidence “remains more resilient than might have been anticipated”.
The organisation’s London price indicator remained more downbeat, with a net balance of -33%, consistent with an outright drop in prices in the capital.
As price growth slows, near term price expectations across the UK were negative for the third month in succession, with 12% more respondents predicting a decline in house prices over the next three months.
RICS said supply is at or around record lows in most parts of the UK.
“Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with RICS data showing inventories on agents books around historic lows on average,” Rubinsohn said. “This is a long running story that may have been exacerbated by recent events, but clearly needs urgent action from the new government.”
Sales declined sharply across the UK, with 34% more respondents reported a fall in transactions.
RICS found the monthly pace of decline in both July and June at its fastest since 2008.
Respondents to RICS’ survey suggested both tax changes and an ongoing fall-out from the UK’s referendum on membership of the European Union in June are contributing to the current mood in the market.
However, a large portion of respondents noted that activity has since returned to normal, while others feel Brexit has only had a very modest or negligible impact.