5 months from Brexit: has the housing market changed?
Speculation and reserve played an important role in the state of the housing market in the surrounding months of the EU referendum, leaving prospective consumers with a certain dubiousness as to whether to proceed with buying or selling. With the pound falling in value on the 24th June 2016, immediately after the results of the referendum were published, people were reluctant to enter into the housing market, uncertain of the outcome on what now seemed like a larger risk than in previous years. When we look at how the market has changed since June 2016, we see that there had not been much change, and that there is only evidence to suggest that people are less willing to take risks in a fragile and ever-changing market.
Statistics show that the market for those wishing to buy a property is doing well, but the buy-to-let market is still unsure, with many different reviews of the state of the market nationwide, with some reporting that there is ‘no problem’ and others reporting a drop in numbers. This attitude could be due to agents ignoring the impending tax changes to Section 24 of the Finance Act, announced to be implicated in April 2017. This could all be subject to change, however, as the Autumn statement on November 23rd could include buy-to-let investors as part of the housing problem, or they could include them as part of the solution.
Reports of regional data suggest that house prices in Wales should recover in the next 6-10 months to prices prior to the credit crunch. The South continues to experience growth in prices, sometimes in double figures, for example in regions like Brighton and Reading. The North also continues the same trend of being a ‘powerhouse’ for businesses, but has yet to see a growth in house prices, signaling that inflation has warded off cash investment. However, over half of UK regions have experienced growth in registrations compared to last year.
Usually, in the summer months, sales for each branch fluctuate, but due to the referendum result, sales have plateaued. This could be due to uncertainty both leading up to the referendum and the state of the market after the result was released. Overall though, a statement from LSL Property Services summarised the changes: ‘sales volumes in England and Wales for the first 8 months of 2016 currently total 574,442, which is 0.5 per cent lower that the first 8 months of 2015.’ The number of new builds has also fallen, due to the uncertainty of the housing market, falling from 40,123 from June 2015 – August 2015 to 36,869 in the same period this year, dropping a total of 8%.
With the uncertain future of the market, many aspects are subject to change in the coming months before Article 50 is invoked.
Article from The Negotiator, November 2016: ‘Housing market treading water’ by Kate Faulkner