British house prices rose for a second month in September and enquiries from buyers picked up for the first time since February, suggesting the housing market has weathered the initial shock of the Brexit vote, a survey showed.
But prices in London fell again due to uncertainty about what the decision to leave the European Union means for the capital and its huge financial services industry, and the impact of a tax hike in April for landlords buying property.
The Royal Institution of Chartered Surveyors said its monthly house price index increased to +17 in September from +13 in August, moving further away from July’s three-year low of +5.
The back-to-back rises over the past two months followed five months of declines.
Simon Rubinsohn, RICS chief economist, said the market was settling down slowly after the EU referendum in June, but the big issue remained a shortage of sellers, a phenomenon which has been pushing up prices since mid-2014.
British finance minister Philip Hammond is expected to announce measures to boost home-building in his first budget statement on Nov. 23.
In London, house price expectations for the coming three months fell, bucking the national trend which saw the biggest increase in surveyors predicting price rises since March.
“Central London remains something of an outlier with contributors telling us this is the one part of the market where there may be further give on prices in the near term,” Rubinsohn said. “Elsewhere the price trend still seems on the up.”
RICS has previously said the Bank of England’s decision to cut interest rates in August for the first since 2009 probably contributed to a brighter mood in the housing market.
Britain’s economy has fared better in the three months after the EU vote than the BoE and most private economists expected.
But an expected pick-up in inflation after a sharp fall in the value of the pound is likely to hurt spending power of many households, and companies have signalled they are set to reduce investment while they wait for more clarity on Britain’s future relationship with the EU.