(Reuters) British house prices were flat for the first time in more than four years during the past three months, a closely watched industry survey showed on Thursday, as falling prices in London and nearby areas dragged down the national average.
The Royal Institution of Chartered Surveyors said its monthly house price balance fell to zero in November from +1 the month before, meaning its members were evenly split between those reporting price rises compared with three months ago and those seeing falls.
This was the lowest level for RICS’s price balance since March 2013, and in line with the average forecast for a decline in a Reuters poll, as tax changes and concerns about Brexit dented demand in central London in particular.
Prices to rise in 2018
RICS members expect prices to fall over the next three months - though less sharply than they thought a couple of months ago - and now expect prices to rise over the next year.
Prices in eastern and northeast England also fell, but there were solid gains in Wales, Northern Ireland and northwest England, RICS said.
London market underperforms
Official data for the year to October, released on Tuesday, painted a similar picture. Prices for the United Kingdom as a whole were 4.5% higher, while London was up 2.1%.
London’s housing market is the most exposed to foreign investors’ concerns about Brexit, as well as to tax increases for property purchases valued at over £1m.
Last month the government scrapped property purchase tax for most first-time buyers as the flagship measure of its annual budget in a bid to tackle falling home ownership among young people who find it increasingly hard to buy their own home.
RICS said its members had seen little sign of increased interest from buyers in the weeks since the change.
The body also reported the biggest fall on record in demand from tenants to rent property - though it said this was likely to be partly a seasonal effect in the run-up to Christmas.