The Royal Institute of Chartered Surveyors, RICS, has said that the dip in housing market activity and the slowing down in property price rises in many areas will not last long.
Demand for housing has slowed for the fourth month in a row in most regions of England and Wales. Consequently, the number of sales fell in every area except Humberside, Yorkshire and south west England.
RICS says that it is confident that the market will improve in ‘the medium term.’ Simon Rubinsohn is the chief economist at RICS. He said that the current slowdown is due to buyers exercising more caution since the rules surrounding mortgage applications were tightened. It also likely to be caused by some concerns that interest rates may rise before the next election, in May 2015.
The housing market in Scotland, however, is very different, RICS has said, and is experiencing a ‘post referendum bounce.’ The market in Northern Ireland is also continuing with its recovery.
With unemployment down and wages finally on the rise, RICS believes that the slowdown the housing market, which the rest of the UK is currently experiencing, will be short lived.
According to data from the Office for National Statistics, unemployment fell by 115,000 during the third quarter, June to September. Wages have risen by 1.3 per cent in the past twelve month period. Howard Archer, chief of IHS Global Insights, said that the slight rise in wages really began as recently as September, calling the increase a much needed step in the right direction.
The Bank of England’s deputy governor, Ben Broadbent, said that he expected wages to continue to outpace inflation at least until late spring of next year. Inflation may fall to 1 per cent, he said, whilst wages may increase by 3 per cent.
