While the UK property bubble hasn’t burst it has “gently deflated” since the vote to leave the European Union, Savills’ director of residential research Susan Emmett has said.
Speaking at the Association of Short Term Lenders annual conference 2016, Emmett told the crowd sterling has been devalued which should push up inflation, uncertainty should feed an economic slowdown, employment growth will be affected, wage growth will suffer, the base rate will be lower for longer and lenders may tighten lending criteria.
On the flipside some consumers are now behaving as normally after acting like a “bunny in the headlights” directly after the vote according to Emmett.
She said: “It’s a bit of a mixed picture. We don’t see the bubble bursting because actually the market is quite steady and stable and it’s not at huge heights.
“It’s more like the bubble has gently deflated a bit rather than a dramatic burst.”
Emmett said house prices have been underpinned by a lower level of transactions since the summer.
However in the case of London, where much of the property bubble speculation was based, she said the market was slowing down before the Brexit vote anyway.
She was still cautious about the future.
Emmett added: “Buyer sentiment will be important. A lot of people will be driven by headlines around how negotiations progress with Europe in the next few months and years, and I think that will affect people’s confidence and desire to make big decisions that will affect their lives such as moving and buying a house.
“So for that reason we expect to see a slower property market than usual.
“Transaction levels may fall but we do not expect a huge decrease in property values.”