In its report “the immediate economic impact of leaving the EU” HM Treasury claims that the latest RICS residential market (surveyor) survey shows “Short-term expectations of growth in house prices have been declining steadily in 2016. RICS have highlighted this may reflect the uncertainty that the possibility of a vote to leave the EU is having on the housing market. Its latest survey shows only 5% more surveyors expect prices to increase rather than fall in the next three months”. What RICS actually said was that this recent fall in price expectations was “Perhaps reflecting the aforementioned uncertainty that the upcoming referendum…but also greater economic uncertainty more generally. RICS also go on to say that the longer term picture on price expectations “remains more upbeat” with 61% more surveyors expecting prices to increase rather than fall in the next twelve months.
The RICS chart below of the net balance of house price expectations by surveyors from the latest RICS residential market survey also illustrates just how variable the net balance of price expectations can be over time. For example, the recent fall in short term 3 month expectations has been smaller than that experienced in 2014 and the recent minor fall in 12 month expectations much less than experienced in 2014.
So in summary, although there has been a small recent fall in short term price expectations by surveyors this is only speculated by RICS to “perhaps” reflect uncertainty created by the referendum and also to be a result of “greater economic uncertainty more generally”. More importantly, longer term 12 month price expectations continue to hold up with 61% more surveyors still expecting prices to rise than those expecting them to fall. And finally, the recent falls in short and long term price expectations are not extraordinary when looking back over recent years and are small and much smaller than reductions observed in 2014 for short and longer term expectations (respectfully).