EU Referendum causes market stutter

Ryan Bembridge

June 13, 2016

europe european union EU

The housing market stuttered in May with buyer demand, transaction levels and house price growth all falling as a result of the uncertainty surrounding the EU Referendum.

haart’s National Housing Market Monitor found that new buyer demand in May fell by 5% from April and agreed transactions dropped by 3.9%.

In London the stutter was more palpable, with demand dropping by 6% and transactions falling by 7.4%.

Mortgage lending grows despite approval drop

The latest YouGov poll put Leave at 43% and Remain at 42%, with the remainder being undecided.

Paul Smith, chief executive of haart, said: “The upcoming EU Referendum is causing high levels of short-term uncertainty in the property market, making both buyers and sellers nervous, resulting in a fall in activity.

“Whether we remain in the EU or not, the UK, particularly London will not falter as a safe haven for investment. It is the uncertainty around our status in the EU that is causing the market to stagnate, once we know the outcome, regardless of what it is, the property market will become reinvigorated.

“In the long-term, house prices will bounce back once more as the age-old problem of a disparity between the amount of stock available and the number of buyers competing, rears its head.”

In London annual house price growth slowed from 7% in April to 5.1% in May after prices fell by 0.2% on a monthly basis.

For the whole of the UK monthly house price growth slowed from 1% in April to 0.8% in May.