Thursday 13 September 2018 8:37 am

UK house prices: London and south east weigh down on growth

House prices sank in London and vast swathes of the south east in August, according to Rics’ UK Residential Market Survey today, as a regional divide made itself felt on a national scale.

Unsold housing stock neared historic lows on estate agents’ book while new instructions fell 15 per cent, down from a three per cent uptick previously, which Rics attributed to a lack of housing for sale.

New buyer enquiries remained flat, while newly agreed sales fell by 10 per cent – a five-month low – with Rics blaming the Bank of England’s recent interest rate rise.

A weak market in London, the south east and to a lesser extent east Anglia saw overall house price growth dip to two per cent, half that of July’s growth figure. On a national level this means prices have stayed flat, Rics said.

Its analysis of the data found that “sales trends are at least stabilising in the capital, although there remains little in the way of positive impetus”.

However, house prices are flourishing in other parts of the UK, with Northern Ireland recording a 48 per cent rise as house prices rose for 60 consecutive months. However, they remain below their 2007 peak.

Scotland house prices spiked 36 per cent, and 39 per cent in Wales, while the north west of England, the Midlands and Yorkshire and Humberside all saw solid growth.

“Near term sales expectations suggest this regional divergence will persist, with the market remaining relatively stronger away from the south of England,” the report said.

“While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging,” said Simon Rubinsohn, chief economist at RICS.

“The story in London and the south east is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market.”