Estate agents have lowest stock of homes for 40 years

The UK housing market is in a state of lethargy, according to property surveyors, with estate agents reporting the lowest stock of properties for nearly 40 years.

Members of the Royal Institution of Chartered Surveyors (RICS) said the market might continue "flatlining" for a while.

New instructions in June fell for the 16th month in a row.

Most surveyors also saw further falls in the number of properties being sold.

The average number of homes on the books of estate agents fell to 42.5 - the lowest number since the survey started in January 1978.

"Political uncertainty" was given by 44% of surveyors as the main reason for the pessimism - nearly double the number who blamed Brexit.

Simon Rubinsohn, RICS' chief economist, said that uncertainty seemed to be "exerting itself on transaction levels, which are flat-lining, and may continue to do so for a while, particularly given the ongoing challenge presented by the low level of stock on the market".

Separately, the Bank of England's latest Credit Conditions Survey of banks and building societies has suggested that home buyers could find it trickier to find mortgage deals with low deposits in the months ahead.

The survey found lenders were likely to rein in lending as they become more cautious about the state of the economy.

Lenders expect a slight reduction in mortgage availability to house buyers with deposits of less than 25%, and "in particular" those with a deposit of below 10%.

The survey also found that unsecured lending - which includes credit cards - had fallen in the second quarter of the year, and was expected to drop further in the third quarter.

Last week, the Halifax, Britain's largest lender, reported that prices fell by 1% in June, with annual growth slipping to 2.6%.

The RICS survey suggests that property values actually rose during the month.

However, that hides an increasing regional divide in price growth.

Five years ago, prices in the south of the country were roaring ahead of prices in the north, but now there has been a reversal.

Prices in London are falling, while they are flat in East Anglia and the South East, according to the RICS survey.

By contrast, property values in the North West, Wales, Northern Ireland and the West Midlands are rising significantly.

"The latest results demonstrate the danger, however tempting, of talking about a single housing market across the country," said Mr Rubinsohn.

"RICS indicators, particularly regarding the price trend, are pointing towards an increasingly divergent picture."

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