UK house prices expected to fall for first time since 2012, says RICS

UK house prices are expected to fall for the first time since November 2012 over the next three months amid uncertainty over the European Union referendum, according to a survey on Thursday.

The Royal Institution of Chartered Surveyors (RICS) said a poll showed most of its members expect prices to fall in the next few months on worries about Brexit and higher taxes on buy-to-let and second home purchases.

Britain votes on its EU membership on 23 June. Chancellor George Osborne last month warned that house prices could decline more than 10% if Britain votes to leave.

RICS said house prices in central London had already fallen, with 35% more property professionals reporting a drop over the past month.

“Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market,” said Simon Rubinsohn.

“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.”

The RICS headline house price balance for changes over the previous three months fell to +19% in May from +39% in April, the lowest reading since February 2015. Analysts had expected +35%.