Here's everything you need to know about the UK's housing market after the Brexit vote
Friday 22 July 2016 10:32am
Helen Cahill
Several developers have said it is too early to tell what will happen to the housing market (Source: Getty)
Before the EU referendum, politicians were forecasting a housing market crash. We've now had a fair bit of data post-Brexit - here's everything we know so far.
The market is slowing down
You can't understand the housing market without looking at transaction volumes. While surveys have suggested asking prices have fallen over the past few weeks and experts think there is worse to come, it's important to remember many people just won't trade in the post-Brexit environment.
Transaction data from HM Revenue and Customs (HMRC) yesterday showed completions fell year-on-year, although this can be attributed to the near 80 per cent jump in volumes in March due to buyers rushing to beat stamp duty changes. HMRC's transaction data will be crucial to understanding what happens next - if transaction numbers fall along with house prices, only forced sellers will be hit by a crash.
Halifax found house prices increased month-on-month in June, but the growth rate has been falling all year. Overall, the market is slowing down - but many estate agents and commentators have argued this is just a natural cycle for the sector. If the crash does come, it will be due to a stagnant labour market, Howard Archer of IHS Global Insight has said.
Get ready for some tough competition
If homeowners put off selling, the great properties that do come onto the market may get more attention than usual.
Tim Jackson of London-based developer SAS Investments said: "If a real peach comes onto the market, there may be some tough negotiations for it."
One London estate agent, who did not want to be named, said many sellers are pulling out on buyers who automatically ask for 10 per cent off the asking price because of Brexit. Proud homeowners won't automatically sell way under the asking price, so be sensitive in negotiations.
If you're looking for a good price, the best people to negotiate with are those who have held their property for a long time, according to Michelle Ricci of Propcision. They've probably made quite a lot on the value of the house, and won't mind selling under the asking price so they can move on quickly.
Homeowners are trembling at the thought of a price plunge
So soon after the EU referendum, much of the data available is an indication of what people think might happen, rather than what has actually happened.
Unsurprisingly, people are worried about the price of their house dropping. The house price sentiment index put together by IHS Markit and estate agents Knight Frank fell into contraction, crashing from 59.7 in June to 48.3 in July (if the index falls below 50, it shows people think prices will drop).
Londoners are feeling relatively confident about house prices going up over the next year - they had the highest score of any region at 56.3.
Posh properties aren't doing well - but that's not to do with Brexit
Transaction volumes for prime central London properties are now lower than they were in 2008. One developer at London's massive Nine Elms regeneration scheme has slashed the value of its portion of the site, and some investors looking to get rid of flats are dropping below the price they originally paid for them.
This, however, is not necessarily to do with Brexit - prices at the Battersea Power station development were slashed earlier this year.
The London housing market is a complex beast. Don't blame it all on Brexit.
http://www.cityam.com/246002/everything-you-need-know-housing-market-post-brexit