Brexit will affect UK house prices but not sales, confidence index suggests
Confidence in the UK housing market has fallen to its lowest point in three years as many think Brexit will affect residential property prices, new research has found.
It means that house price optimism is now at its lowest since June 2013 although consumers believe the referendum result will have a minimal impact on buying and selling, according to the latest Halifax Housing Market Confidence Tracker.
The report shows that optimism has fallen by 14 points since March, the largest drop since the lender’s survey began.
Despite this, a clear majority of 57% still expect the average UK price to be higher in a year’s time, more than three times the proportion who expect a lower average at 15% while 33% feel that the next 12 months will be a good time to either buy and sell, down by six points from the beginning of the year.
Brexit appears to have had little impact on buying and selling intentions, with only 15% of those thinking of buying or selling a property before the vote saying they have since delayed or cancelled their plans as a result of it.
As the Bank of England voted to keep its base rate on hold in November, some 53% of mortgage holders expect mortgage interest rates to be the same a year from now, the survey also finds. The proportion of those expecting rates to be higher in a year’s time is 38%, compared to 52% in June 2015.
‘Optimism in the housing market has taken a fall in recent months, with many people now expecting a general slowdown in the market and no, or little, change in house prices over the coming year,’ said Martin Ellis, Halifax housing economist .
‘This sentiment is consistent with recent findings from the Halifax house price index which show that prices are still growing, but to a lesser extent. Confidence with the wider economy has tracked down sharply since May 2015 but encouragingly, optimism has bounced back to where it was a year ago and is broadly neutral,’ he added.
The research also shows that 49% expect that leaving the EU will make no difference to house prices in the next 12 months, 20% think that house prices will be higher as a result of the referendum, whilst 25% think they will be lower.