"Uncertainty" was the word on everyone's lips after Britain voted to leave the EU. As the pound plunged and stocks suffered, it seemed likely that house prices would follow. So, now that some of the Brexit dust has settled, what's really going on in the housing market?
The state of the market
The first half of the year saw house sale prices soar. In June, properties were up 10% year-on-year. However, the Brexit result seemed to slam on the brakes, with asking prices falling by an average £3,602 this August. Before you panic, it's worth noting that this 1.2% fall from July is in line with the usual summer slump. It may be more to do with people taking a break from house-hunting until after the holiday season than worrying about Britain leaving the EU. Homeowners should also remember that the first half of 2016 saw a jump in sales as buy-to-let purchasers rushed to beat the rise in stamp duty.
The impact of Brexit
Although it's normal for house prices to dip in summer, the vote to leave the EU does seem to have had an effect. In July, the number of properties on the market dropped to a record low, and surveyors across the UK predict that house prices will continue to fall over the next three months. The 2.6% decrease in London house prices is higher than usual, with prices in the capital falling faster than anywhere else in England.
What happens next?
Thankfully, it's not all doom and gloom. According to a recent Royal Institution of Chartered Surveyors (RICS) survey, the market is simply taking a breather. The poll revealed that the majority of surveyors believe house prices will rise again within the next year. Demand for office space in London has already recovered, and there is confidence that the residential market won’t be far behind.
What does this mean for sellers?
The next three months could be difficult for private house sales, as uncertainty in the market increases buyer caution. This is particularly true in areas which have experienced a drop in price: London, East Anglia, the north of England and the West Midlands. However, the current shortage of homes on the market means prices are being pushed up. Following the RICS survey results, it is likely the market will pick up within a year.