UK house prices stagnate as London drags down market

The Royal Institution of Chartered Surveyors said its gauge of prices slipped to zero, effectively marking a ninth month of stagnation, with weakness in London and the southeast weighing on the national market. 

New buyers registering with real estate agents - a leading indicator of demand - fell for an 11th month, and instructions from sellers also declined. That pushed stocks on realtors’ books to a record low.

“Key RICS indicators across huge swathes of the country” are “still showing considerable resilience but data for London, the southeast and east Anglia rather more subdued,” said RICS Chief Economist Simon Rubinsohn.

Sluggish wage growth, high house prices, the prospect of higher interest rates and the decision to leave the European Union are undermining demand for property in the UK after years of rapid growth. Mortgage lender Halifax said on Wednesday that annual price gains have slowed to a four-year low.

Real-estate broker Countrywide fell to a record low on Thursday after the company said a stagnant market and increased competition prompted a decision not to pay a dividend for 2017.

RICS’s longer-term indicator showed that agents expect house prices to increase more slowly than rents, though both should rise about 15% over the next five years, RICS said.

One support for housing is coming from the labour market, with unemployment at the lowest in four decades. A separate report on Thursday from the  Recruitment and Employment Confederation showed job vacancies rose last month and both starting salaries and hourly temporary wages increased.