Confidence in the housing market has “evaporated” since the EU referendum, according to property search engine Home.co.uk
The rather stark analysis comes in the site’s house price index for July in the aftermath of the Brexit vote, recording a 0.2% monthly slip in average prices in England and Wales to £296,910, ending a 19-month rally.
Time on the market has also edged up by two days to 82.
Home.co.uk, which analyses property portal listings as well as estate agents’ own websites, found London prices have fallen 1.1% to £544,461 while prices in the north-east have dropped 0.7% to £154,437.
The website claims that the confidence in the marketplace that took years to restore after the fall of Lehman Brothers has evaporated post-Brexit.
This is despite its own evidence that several English regions and Wales still indicate price growth. The east midlands rose the most at 0.7% over the past month to £209,699, followed by the 0.4% growth in the north-west and Wales at £185,861 and £185,617 respectively.
Doug Shepherd, director at Home.co.uk, said: “It is too early to fully appreciate the Brexit fallout for the UK property market but the initial indications are certainly worrying. The foreign exchange markets and stock exchanges reacted quickly, sending the pound’s value downwards; the share values of home builders down dramatically; and, as this Index shows, the value of residential property in the UK is also now falling.
“Expect both consumer and investment decisions to be delayed until there is somewhat less uncertainty about future prospects for the UK economy; unfortunately, however, uncertainty looks set to remain for some time.
“While continued weakness in the pound should help the exports of some companies, we cannot export our houses. Until last month, the property market had been functioning well and was helping to shore up the fragile UK economy. Brexit just knocked off one of the wheels.”
In contrast to Home’s gloomy message, London’s FTSE 100 index ended on Monday at its highest level in 11 months. Share prices of house builders and estate agents have rallied, as have Rightmove and Zoopla.
Comments (4)
“Evaporated” it’s only been 20 days since we had a vote. They don’t even have a month of data. Seems a tad premature to be spouting off about confidence evaporating.
The slip is price is due to a huge disconnect in the market place, properties are being hugely over priced when we are in a tougher market because bigger agents are trying to buy business, we’re already (I work in an independent) getting their stock back from a 8 week period pre Brexit where prices have been over shot massively and the properties became sitting ducks. Unfortunately for them they caused damage to the marketing of their own homes and now having to go below the price they should have been on in the first place and this is creating a huge distortion in prices. And don’t forget it’s been a tough time for property, we had the stamp duty changes making it cheaper for under £925,000 but much more expensive over, then hit with 3% stamp for second home owners and investors which makes a huge difference in the London market and now not only Brexit but a change of MP. ultimately the desire for people and need for people to move is still there and it’s those that just fancy a change that will stick it out and really do you want a non committal vendor on your books? Lending is at it’s lowest and unless you job is effected by Brexit then you’ll probably still move as 5 years from now 10 years from now etc. it all comes back around, no one can wait for ever when they want to buy their first home or are bursting at the seams of their current home and need more space.
In a tougher property market more sellers will want to use experienced local agents with expert market knowledge to help them sell promptly without sacrificing the desire to achieve the best price.
Uncertainty is the perfect environment for showing up the weakness of on-line agents, so I welcome tough conditions where the larger agents spill more of their unsold instructions too.
Bring it on!
Ummm…
I can’t help thinking that there’s a tad bit of hype from Home here.
An additional two days on the market and 0.2% slip …hardly an evaporation in the true sense of the word.
We’ve seen the number of our conveyancing quotes rising surely but steadily in the last week; whilst we were getting 12-15 per day at the beginning of last week, we received 25 on Friday and 29 yesterday. Guess that means that the market is massively overheated with transaction levels increasing by about 225% …..