House prices will stagnate in 2019 and the number of sales fall as a mixture of Brexit and affordability constraints takes its toll on the property market, according to Britain’s surveyors and valuers.
The Royal Institution of Chartered Surveyors (Rics) said it expected the number of house sales to fall back by 5% to around 1.15m compared with 2018. The number of sales will remain sharply below the 1.7m that changed hands in the peak year of 2006.
Prices will come to a standstill nationally, said Rics, although in London and the south-east they are likely to “pull back” slightly. It expects prices to be neutral in East Anglia and the south-west, but for there to be “solid momentum” behind price rises in Northern Ireland, the north-west, Scotland and Wales.
Brexit uncertainty is a significant factor, said the surveyors body, but the key issue was that the ceiling for affordability has been reached in much of the south.
“House prices are now a greater multiple of earnings than at any point since records began,” said Rics. “Such high house prices are shutting more and more people from accessing the market.”
Its forecast tallies with that of the property website Rightmove, which reckons the inflation rate for the average asking price of a property will fall to 0% in the UK next year, with prices in the south-east commuter belt dropping by 2%.
But Rics said Bank of England projections of a 30% fall in house prices following a disorderly Brexit – driven by a rise in interest rates – were “implausible”. “Some of the assumptions behind the disorderly Brexit scenario seem implausible to us,” it said. “Mainly, we would expect the Bank to cut interest rates and potentially restart quantitative easing in the wake of no-deal.”