Outlook on the housing market worst for 20 years

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Surveyors and real estate agents expect the real estate market outlook to be the worst in 20 years in the next three months.

A net result of 28% of members of the Royal Institution of Chartered Surveyors (RICS) expects sales to decline over the next three months.

This is the worst reading since records began in October 1998, and the pessimism is attributed to the lack of clarity regarding Brexit.

Lack of supply and affordability continued to impact the market.

Turnover expectations for the next three months are now either unchanged, no change is forecast or negative, indicating declining sales in all parts of the UK.

Do not fall

More and more surveyors said house prices declined rather than increased in December, while the 19% net balance led to a decline rather than an increase.

This was an increase of 11% in November and marked the fourth month in a row negative house price quotations.

New buyer inquiries receded in December for the fifth month in a row.

The decline in the interest of buyers was offset by a decline in the number of new real estate properties entering the market.

The supply of new real estate has been shrinking for six months, said Simon Rubinsohn, chief economist at RICS.

"It's hardly surprising that the path to Brexit, which dominates the news agenda, is still uncertain, and even considering the normal Christmas holidays, buyers' interest in purchasing real estate declined in December.

"This is also shown very clearly in a worsening short-term sales expectation."

Steamed living activity

The recent official figures released by the National Statistics Office (ONS) and the land register published earlier in the week suggest that housing activity was dampened by Brexit uncertainty.

The average UK home price in October was £ 230,630, down 0.1% mom.

Looking to the future, estate agents are a little more hopeful for 12 months than their sales expectations.

"Looking further outside, the suggestion that transactions should stabilize at the national level is a bit more reassuring than the fog, but that moment is an aberration to many survey respondents," said Rubinsohn.

"It's now hard to see developers expanding the supply pipeline in this environment."

He said that, if one approached the government's goals, "much more input from other delivery channels, including local authorities, would be required.