"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"
- RICS
According to its data, house prices in central London are already falling, and while prices are continuing to climb modestly across the rest of the UK, this trend looks set to fade. 10% more respondents to RICS' residential market survey predict that prices will fall rather than rise over the coming three months.
London and East Anglia are expected to be worst hit with 43% (net balance) and 33% (net balance) of respondents saying that prices will fall over the next quarter.
Buyer demand fell across the UK for the second consecutive month and at the fastest pace since 2008, with 33% more property professionals saying that demand decreased last month.
Despite the fall in house prices, RICS Chief Economist Simon Rubinsohn says it is "unlikely that we are seeing the emergence of a more affordable market".
He added: "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."
Although house prices are predicted to regain momentum, rents look set to outpace them, with UK rents predicted to increase by 4.7% year-on-year for the next five years, compared to house price increases of 4.1%.
Andy Sommerville, Director of Search Acumen, commented: “The government must be slightly startled that the possibility of a Brexit is engineering, for a very brief window, what it wanted to achieve along – greater affordability in housing. Fear, whether it’s rational or not, is driving the housing market, with prices in the capital already dipping downward, potentially due to overseas investors halting activity and regular citizens choosing to sit still until they’re on firmer ground.
“Regardless of the referendum, housing prospects remains bleak and a short term drop is unlikely to be beneficial to the average first time buyer, although some may be able to capitalise on the temporary advantage."