House Prices Expected To See Short Term Dip
House prices are expected to see a short-term fall over the next few months for the first time in nearly four years, according to a poll of surveyors.
The report from the Royal Institution of Chartered Surveyors (RICS) pointed to uncertainty around the EU referendum and a recent hike in stamp duty tax for landlords as weighing on the market.
Shares (Berlin: DI6.BE - news) in house builders such as Taylor Wimpey (LSE: TW.L - news) , Berkeley, Persimmon (Other OTC: PSMMF - news) and Bellway (Other OTC: BLWYY - news) fell in the wake of the survey - the latter despite an update in which it said it had seen a "positive trading environment" with no noticeable effect from this month's poll.
According to the RICS poll, for the first time since November 2012 a majority of members questioned expected that prices over the next three months would fall.
However, most still saw an increase over a 12-month horizon.
It (Other OTC: ITGL - news) follows a warning by Chancellor George Osborne last month that house prices could be dragged lower by a Leave vote.
RICS chief economist Simon Rubinsohn said that for now the group's members were only forecasting a temporary dip in prices, which have surged by as much as a third in the past five years.
He added: "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.
"There is not at this point a sense that a fundamental shift is taking place in the market."
RICS said its headline house price balance for changes over the previous three months fell to its lowest since February 2015 at +19 for May, down from +39 in April and below forecasts.
Sales dropped at the fastest rate since August 2008, and new buyer inquiries declined at the sharpest pace since June 2008.