What’s Going On in the Post-Brexit Housing Market?
It’s been a turbulent time in the housing market just lately with the UK economy working hard to steady itself in the aftermath of the Brexit vote.
The Guardian, The Financial Times and the International Business Times UK amongst other publications have reported on the recent drop in asking prices in the wake of Britain’s decision to leave the EU.
The Guardian has reported that asking prices in England and Wales have dropped since 0.9% since June. According to Rightmove however, this figure isn’t too much cause for concern as a typical July slowdown would be 0.4% – therefore, this figure represents a slight exaggeration due to the impact of the EU vote in this usually quieter time of the year.
Rightmove’s Director, Miles Shipside offered more consolation, sharing that the decline was, ‘within the range that we have seen at this time of year since 2010′. He continues:
With the onset of the summer holiday season, new sellers typically price more conservatively and the average drop in the month of July is 0.4% over the last six years. Perhaps unsurprisingly, this July’s fall is marginally larger, as political turbulence has a track record of unsettling sentiment’.
The International Business Times also shares Rightmove’s analysis that the economic and political uncertainty has ‘accelerated a seasonal summer slowdown.’ Another quote from the Rightmove boss, Shipside, seeks to alleviate panic:
“The summary so far, based on two weeks of post-Brexit-vote statistics is that the housing market remains steady, underpinned by the same fundamentals that have led to its recovery since the last downturn.”
The Financial Times paints a slightly bleaker picture, focusing on the capital, where it they have reported that the number of cuts to asking prices in Central London saw a surge of 163% in 12 days after the EU referendum. Despite these cuts to entice nervous homebuyers, no increase in sales has been reported. Completions have seen a downturn of 18% since the Referendum, a figure that’s down 43% on the previous year. There has also been a decline in homes under offer – dropping by 32% from the days leading up to the vote.
It’s not bad news for everyone, though. Managing Director of LonRes, Anthony Payne suggested that cuts to house prices might eventually encourage a return of homebuyers who feel alienated by sellers and overpricing of London property in pre-Brexit Britain:
“People may come back in thinking they are getting slightly better value for money. Whenever markets fall, there is a bite mark at which buyers say, ‘at that price I am insulated from price falls’.”