JUNE 2016: UK RESIDENTIAL MARKET SURVEY POST-REFERENDUM UNCERTAINTY HITS SENTIMENT
• Buyer enquiries fall for third consecutive month
• Agreed sales fall sharply with activity expected to remain subdued in the coming months
• Medium term price expectations slip, but remain positive, with rent expectations still firm
The June RICS Residential Market Survey shows price growth continuing to moderate as the uncertainty engendered in the wake of the EU referendum takes its toll on markets in most parts of the UK.
New buyer enquiries declined across the vast majority of the UK, its third consecutive negative reading and the lowest since mid-2008 (this follows firm growth through the latter half of 2015 and the early months of this year). The more southern parts of England saw the sharpest contraction in demand with 58% more surveyors in London seeing a decline rather than a rise in buyer interest. In East Anglia and the South East, also reported a fall in enquiries. Anecdotal evidence suggests that uncertainty relating to the EU referendum result was the primary driver of the slump although the higher stamp duty rates at the upper end of the market also continue to weigh on demand.
Meanwhile, the supply of properties coming available for sale fell across all areas except Northern Ireland.This represents the steepest fall on record.
The combination of sluggish demand and a continued shortage of stock led to a further decline in agreed sales over the month. This represents the third consecutive monthly fall in activity (in the wake of increases in the early months of this year) with surveyors in most parts of the UK reporting a decrease in June. The ongoing uncertainty is expected to continue to weigh on the market over the months.
Looking further into the future, the twelve month sales expectations series turned negative for the first time in four years.
The greater economic and political uncertainty is also weighing on near-term price expectations. Price expectations are now in negative territory (albeit only marginally in Wales and Northern Ireland) across all parts of the UK. The outlook for price growth over the year to come has also softened significantly.
Post Referendum has seen an increase in sales and new instructions but whether this is a short term reaction or nor only time will tell.
Please do not hesitate to contact me should you wish to discuss any matter regarding the marketing of your property. Oliver Miles FRICS RICS Registered Valuer.