For once, the legion of surveyors, mortgage brokers, agents and statisticians who compile house price surveys have found something they can agree on: the bubble has deflated. The Royal Institute of Chartered Surveyors (RICS) sentiment survey released today says price growth faded in September, with prices even falling in London.
The 346 RICS members polled expected a modest 1% rise over the next 12 months in London and a 2.1% rise for the rest of the country. And they aren’t the only ones who see an end to growth. Halifax, which released its own survey yesterday, said prices rose just 0.6% in September, while Nationwide last week said prices fell by 0.2%.
This, the lenders and the surveyors seem to agree, is about time. RICS chief economist Simon Rubinsohn said the slowdown was a ‘healthy development’, attributing it to affordability rules, expectations of an interest rate hike in the new year and the Bank of England talking more about risks.
Halifax, meanwhile, commented that lower sales in August ‘suggests a better balance between supply and demand’, with its housing economist Martin Ellis adding that real wage deflation had also depressed growth.
As for the future, it seems we’re in for more of the same. ‘With interest rates still at historically low levels and long-term house price expectations positive, households are not under any real economic pressure to sell,’ Rubinsohn said, adding that the outlook for prices for 2015 would be far more subdued than 2014.
It doesn’t exactly sound like a cause to celebrate, but at least it’s better than the bubble bursting.