Confidence in property market beginning to return after 'Brexit wobble' as estate agents report rising prices
The growth in UK house prices slowed to its lowest level in three years in July, according to the latest survey of estate agents.
However, there are signs of confidence returning after a 'wobble' stemming from the vote to leave the European Union.
A total of 5 per cent more estate agents reported house prices rising rather than falling last month, according to the Royal Institution of Chartered Surveyors report.
But the RICS report also found property sales continued to drop sharply across the country, with a net balance of 34 per cent of agents reporting a fall rather than an increase.
This was similar to June, when the decline in sales was the fastest seen since the 2008, when the height of the credit crisis took hold.
It is also a continuation of a trend that began back in April following the introduction of the tax surcharge of 3 per cent on investment properties.
However, RICS said there were a wide range of views among agents with some suggesting that activity had 'picked up after an initial wobble', while others cite the Brexit vote as having only a 'modest or negligible impact'.
There are more widespread positive expectations for the year ahead as agents upgraded their estimated compared with June.
The net balance of agents expecting house prices to head upwards rather than fall in the year ahead increased from a neutral level of zero to 23 per cent in July.
While more agents are now expecting values to head upwards in the coming year, expectations are still softer than six months ago, when a balance of 66 per cent of agents had anticipated rising prices.
A balance of 13 per cent of agents now expect to see sales increase in the coming year, turning positive after a negative reading of minus 12 per cent in June.
Across the country, agents typically expect house prices to edge up by close to 3 per cent a year for the next five years, while in London prices are expected to lift by around 4 per cent annually over the same period.
Simon Rubinsohn, chief economist at RICS, said: 'The rebound in the key 12 month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.'
RICS said the 'acute shortage of property for sale', with the supply of homes on the market close to record lows in most parts of the UK, appears to be helping underpin house prices.
Last week's cut in interest rates by the Bank of England to 0.25 per cent could also help to encourage more buyers into the market.
Jeremy Leaf, a north London estate agent, said: 'On the ground, we are finding that a sense of realism has returned to the market and that genuine sellers and buyers are negotiating hard to make deals happen.
'Clearly there are some buyers who feel it is just too uncertain at the moment but most seem determined to go ahead. In any event, prices are being underpinned by a continued shortage of property although we have noticed first-time buyers are still quite active and investors from abroad are showing more interest in the market.'