New buyer enquiries in the run-up to and immediate aftermath of the EU referendum fell to their lowest reading since mid-2008, while instructions had their steepest fall on record with 45% more surveyors reporting a drop, the RICS UK Residential market survey for June has found.
The study of surveyor sentiment, the first major release that takes account of at least some of the post-Brexit property world, found 36% more chartered surveyors nationally reporting a fall in interest.
Surveyors also recorded a third successive decline in monthly sales, while 26% more respondents anticipated a further drop in sales across the UK over the next three months.
This is the most negative reading for near-term expectations since 1998.
Looking further ahead over the next 12 months, sales expectations have turned negative for the first time in four years with 12% more contributors expecting transactions to fall rather than rise.
Respondents said they were still seeing house price rises but at a much slower rate, with 16% more seeing prices going up in June compared with 50% at the start of 2016.
London remains the only region where respondents are seeing prices fall, with 46% seeing drops, while across the UK 27% more respondents expect prices to fall rather than rise over the next three months.
Simon Rubinsohn, RICS chief economist, said: “Big events such as elections typically do unsettle markets so it is no surprise that the EU referendum has been associated with a downturn in activity.
“However, even without the build-up to the vote and subsequent decision in favour of Brexit, it is likely that the housing numbers would have slowed during the second quarter of the year, following the rush in many parts of the country from buy-to-let investors to secure purchases ahead of the tax changes.
“RICS data does suggest that the dip in activity will persist over the coming months, but the critical influence looking further ahead is how the economy performs in the wake of the uncertainty triggered by the vote to leave.
“Respondents to the survey are understandably cautious, but with interest rates heading lower and sterling significantly so, it remains to be seen whether the concerns about a possible stalling in both corporate investment and recruitment are justified.”