Expectations for a negative shock to house prices following the UK’s decision to the leave the EU are being questioned as research revealed assumptions for nothing other than a seasonal 1 per cent drop.
Research by online estate agents eMoov, found 70 per cent believed there would be a change in house prices as a result of Brexit, 54 percentage points of which suggested prices would maintain their upward trend.
The survey – conducted by RWB to just over 1,000 UK adults earlier this month – found over a five year time horizon, 78 per cent said the leave vote would impact property values, with 64 per cent of those believing it would, again, see an increase.
This week, several sets of statistics painted a varied picture of the mortgage market this summer.
House purchase approvals were 19 per cent lower in July than the same month last year, according to the British Bankers Association, although during the first seven months of 2016, approvals were some 2 per cent higher than during the same period of 2015.
HM Revenue & Customs figures revealed the number of residential property transactions decreased by 0.9 per cent between June and July, with this month’s seasonally adjusted total being 8.3 per cent less than the same month last year.
Meanwhile, the Council of Mortgage Lenders (CML) found gross mortgage lending to be steady in July, estimated at £21.4bn, compared to June’s gross total of £21.5 billion and only 1 per cent lower than £21.6bn in July last year.
However, the estate agents’ research suggested that despite the abundance of Brexit doomsday predictions, 78 per cent of respondents were not swayed by the vote and it had no impact on their decision to sell.
Nearly a quarter (23 per cent) of those asked, stated when voting in the referendum their decision was swayed by selling a property, with over half of those (59 per cent) voting to remain because they were involved in a sale.
The government’s promise and performance to build more houses has been woefully inadequate, according to eMoov, so it was not surprised to find 53 per cent of people stating Brexit would have a negative impact on house building, due to a lower number of European tradespeople.
The firm also asked if the vote would lead to another recession in the UK, with 65 per cent suggesting the vote could trigger an economic downturn.
Its founder Russell Quirk said there was still little evidence to show any detrimental impact on the UK property market, despite the media looking to scare the British public into thinking otherwise.
“Any lasting damage will take time to show conclusively, but had there been any as a result of the Brexit vote, the shockwaves would have already impacted on the ground level and it appears that this just isn’t the case.”
peter.walker@ft.com
