Richard Blake Header
Between the month of May and the first two weeks of June, when this summary was written, the country’s housing market is in a state of inertia. Demand for property has fallen at its fastest rate in eight years and a short term dip in house prices has been forecast over the next few months by the Royal Institute of Chartered Surveyors.
The price momentum and buyer demand have both contracted, partly because of uncertainty surrounding the referendum on EU membership. There has also been a hiatus following the prior rush to buy that occurred earlier this year when landlords and holiday home buyers were buying properties ahead of the 3% hike in Stamp Duty introduced on the 1st April. Tighter regulations in the mortgage market are also contributing to the slow down. Some agents are experiencing falling values in London.
Although we are achieving sales here in Dartmouth, there is a definite lull as we await the referendum result. Predominantly, the current malaise in the market is generally down to uncertainty of what a Brexit would mean for both the economy and the housing market. The Chancellor, the Governor of the Bank of England and ratings agency Fitch and Moody have all warned that house prices could fall substantially by anywhere from 10 to 25% by 2018 but who knows.
London would probably be hardest hit by a vote to leave the EU because it has the highest proportion of foreign nationals in the country, many of whom may not be able to live there due to tighter immigration rules. This would obviously have some knock on effect to the market here in the South West. Many analysts and house builders say that whilst supply levels remain so far behind demand, prices will continue to rise whether we vote for Brexit or not. We will of course find out shortly; by the time this magazine is published, we may well know the result but will have to wait much longer to understand which long term direction the market will then take.
Fist published By The Dart July 2016 issue