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House prices could 'take off again' within next year



Rics report reveals surveyors' confidence growing once more after taking a knock in the EU referendum

Carl Court/Getty Images

House prices could 'take off again' within next year House price growth is slowing in the wake of the Brexit vote, as the number of transactions and enquiries from new prospective buyers continues to slump.

But crucially, a survey by the Royal Institute of Chartered Surveyors (Rics), which the Daily Telegraph says is "widely seen as a good indicator" of the state of the market, still recorded positive growth in house prices in July.

It is also predicting the market could "take off again" in the next year, reports the BBC.

The poll of Rics members revealed the negative effect of the shock EU referendum result, with Reuters noting transaction levels were unchanged in June, marking the weakest two months since the financial crisis.

New buyer enquiries are still falling and the number of properties for sale is at "historic lows".

The continuing shortage of homes is helping to support prices, however, and five per cent more surveyors reported an increase than a fall last month. The only areas to see an outright drop were London, East Anglia, the north of England and the West Midlands.

Surveyors still expect prices to turn mildly negative across the country in the next three months, but there has been a rebound in confidence over prospects for the next year, with 23 per cent more respondents reporting prices will rise.

At the last survey, in the immediate aftermath of the vote at the end of June, views on the next 12 months were evenly balanced.

Prices are expected to increase by an average of four per cent, even in London, and three per cent across the rest of the country over the next five years.

Rics chief economist said: "The rebound in the key 12-month indicators in the July survey suggests that confidence remains more resilient than might have been anticipated."

But, he added: "It is hard to escape the stark message regarding supply."

It is also notable that the survey was taken before the latest interest rate cut last week. This should further reduce already low mortgage rates and could stoke demand, which would act positively on prices given the shortage of available homes to buy.

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