UK property market value drops by £27bn as sales decline for 16th month running

A fall in the number of rental properties available has pushed rents up

The number of property sales agreed has been in decline for over a year (REUTERS)

The total value of the UK property market has fallen by £27bn since the beginning of the year, according to new research from Zoopla, with Brexit uncertainty blamed for the decline.

The average UK property decreased in value by £5.12 per day in the first six months of the year, the study showed, bringing the total worth of the market down 0.33 per cent.

The analysis revealed the North East of England was the best-performing region in the first half of 2018, with prices rising by 3.31 per cent, followed by Wales, with growth of 1.4 per cent, and then London, where prices rose 0.75 per cent.

The worst-performing region was the South West of England, with a 2.51 per cent decline, followed by Yorkshire and the Humber and the East Midlands, with reductions of 2.12 per cent and 1.22 per cent respectively.

Lawrence Hall, spokesperson for Zoopla, said the figures were “not surprising” , and added: “Uncertainty around Brexit is a very real factor in the market, however on the positive side, the drop is creating a potential opportunity for first time buyers to get a foot on the ladder in some regions across Britain.”

Meanwhile, the Royal Institution of Chartered Surveyors said its latest survey showed the number of agreed sales had fallen for the sixteenth month in a row, and added that the continuing pattern of decline suggested that the trend would not improve over the coming months.

There was bad news for renters too, as RICS reported lettings data revealed a lower supply of rental properties coming to market, which has helped push rents up. RICS predicted rents will undergo a cumulative average rise of around fifteen per cent over the course of the next five years.

Simon Rubinsohn, RICS chief economist, said: “It is hard to see what is going to provide much impetus for activity in the housing market in the near term. Meanwhile the on-going challenges around lifting the delivery pipeline, reflected in last week’s disappointing data on housing starts, is captured in the suspicion in the survey that prices are likely to resume an upward course over the coming year.

“The challenge is also visible in the response of the private lettings market to change to the tax treatment on investment properties. While it is understandable that the government wanted to provide a lift for first time buyers, this may well come at the cost of higher rents as the appeal of buy to let diminishes.”