The upcoming Brexit referendum is fuelling existing housing market uncertainty, according to concerning new research.
Hometrack’s UK Cities House Price Index suggests there has already been a 2% drop in sales in major British cities.
Forthcoming changes in stamp duty land tax and alterations to landlords’ tax relief are already contributing to buyer uncertainty. The upcoming vote is likely to drive worries still further.
According to the Index, city level house price values were still up by 10.2% in the year, in comparison to the 8.6% rise recorded one year previously.
On average, UK city house values stand at £231,700. Typical values range from just £109,000 in Glasgow to £455,000 in London.
However, transactions in what were former hotspots dropped significantly, with prices down by 7% in London and by 20% in Cambridge.
The UK Cities House Price Index suggests that the Brexit vote will further impact on future volumes.
Unfortunately, the referendum falls at the same time when changes in stamp duty are expected to hit investors in the pocket. After making up one in five transactions during 2015, the impact of the alterations is yet to be seen, but the report questioned further house price growth, with volumes invariably slowing.
Annual rate of growth in cities across the South of England is already starting to slow, with sales down and affordability pressures growing.
Brexit referendum increasing market uncertainty
Richard Donnell, insight director at Hometrack, noted, ‘slower growth in sales volumes has been a trend seen over the last three years across high-value, high-growth cities such as Cambridge, Oxford, Aberdeen and London, where house prices have been rising for six consecutive years.’
‘High housing and moving costs are limiting access to the market for a growing number of households which, in our view, will result in lower turnover and slower house price growth. A vote to remain in the EU should see a return to business as usual whereas a vote to leave will create additional uncertainty,’ he added.