Phone Us

Housing Market Set to Slow Down Following Brexit and Stamp Duty Changes

A loss of momentum in the housing market is expected in the upcoming months as landlord’s rush to avoid stamp duty subsides and uncertainty about the future of the European Union continues, according to a new survey.

UK Housing Properties Investment

A loss of momentum in the housing market is expected in the upcoming months as landlord’s rush to avoid stamp duty subsides and uncertainty about the future of the European Union continues, according to a new survey.

The Royal Institution of Chartered Surveyors (RICS) released their latest poll addressing the future of UK’s housing market and found that confidence in the market for Q3 2016 has fallen due to stamp duty changes, concern over the Brexit vote, a weaker sterling, and the mayoral elections in May.


Before the new stamp duty levy took effect in April 1st, 74% of respondents expected there to be a rush on buy-to-let purchases, according to the RICS’ February market survey. In their latest poll however, RICS found only 17% expected to see an increase in sales in Q3 of 2016.


As indicated by RICS’ price balance, the rate of house price growth has slowed down compared to previous months. Although increase in house prices has decelerated, those surveyed maintained an optimistic attitude towards price growth over the long term – with 21% expecting house prices to increase across the UK in the coming months.


With the lack of supply continuing to be a key driver in the market, prices are said to continue increasing despite demand cooling down. RICS estimates that the amount of stock available per surveyor remains nearly 20% down on a year-to-year comparison.


In London, the residential market is experiencing a slight decline in house prices, with the mayoral elections, EU referendum and the weakening of the pound all affecting the market in the capital.


With regards to the rental market, RICS suggest demand from tenants continues to rise with solid growth dispersed across the UK. Surveyors remain optimistic and anticipate an average increase of 4.5% annual rental growth over the next five years.


Commenting on the market slow-down, chief economist at RICS, Simon Rubinsohn mentions that regardless of the outcome of the forthcoming elections and Brexit vote, “in the long term, the imbalance between demand and supply will still exert a strong influence on the market, with house prices expected to rise by close to 25pc over the next five years.”

X
Cookies on our website:
This website uses cookies.
I'm OK with this Cookie Settings ?