EU referendum knocks buyer confidence in St Albans

The UK has voted to leave the EU (Image: Nerthuz)

Property values dipped 0.4 per cent nationally in May – the deepest fall since November 2011 – and experts agree that buyer caution in the run up to the EU Referendum has been a major factor in this.

Nick Doyle, Aitchisons’ operations director, said that the market in St Albans reflects the national trend, noting hesitancy among both vendors and buyers as the Referendum approaches.

While Aitchisons report a continued demand for properties, Nick admits that “uncertainty reigns” – and a slow down in advance of such a major vote is no great surprise.

He said: “Prices in the property market are consistently based on one overriding factor or emotion – confidence. From an agent’s perspective, the 23rd couldn’t come quick enough.”

In London, house prices fell by 0.3 per cent (£1,769) month-on-month in May, with uncertainty cited as the main reason.

All of this has combined to make May the weakest month for home sales in five years, after stamp duty caused a rush in buy-to-let sales during March.

Adrian Gill, director of Your Move and Reeds Rains estate agents, says May’s correction in property values is a natural consequence of the surge in activity at the start of the year, when second-home buyers and landlords brought forward their purchases to avoid the stamp duty surcharge.

He said: “That tax hike and the Government’s anti-landlord policies are weighing down the market, but the main factor is short-term confidence.

“The housing market has been holding its breath ahead of the referendum.”

Philip Tottenham, Aubrey & Finn’s business manager, says that a remain vote is “widely expected to promise a bounce in prices” – an outcome that was “taken somewhat for granted” initially.

“We have seen some vendors deciding to hold off until after the vote to take advantage of that,” Philip explains.

“Correspondingly, the story from searchers has been about the lack of available options, with some deciding to hold off their search until there is more stock. “

And while early predictions may have pointed to a remain win, Philip notes that things are now looking less clear cut.

“Some buyers are pulling back from searching in the expectation of getting better value,” he said.

“However, it’s worth noting that a reported drop in prices is typically matched by a plethora of buyers coming out of the woodwork, propping prices back up again – with the reverse true on the vendor side.”

Richard Fossey, manager of Ashtons, St Albans, says a levelling-out of prices during the last two months has been the result of the recent period of uncertainty and shouldn’t be a cause for concern.

He describes it as “merely the consequence of a market calming down after a frenzied rush to beat the 3 per cent increase in stamp duty on second purchases, which probably created a small artificial spike in prices during the first three months of 2016 and a bit of a buy-to-let surge.”

Richard predicts a bright future for the local market, saying: “On a very positive note, the volume of sales agreed in May 2016 was a record month at three of Ashtons’ four local offices. While there has been a little bit of a slow down at the very top end of the market as buyers have been able to enjoy a reasonable amount of choice, the general market-place has remained very strong.

“The increase in the number of new listings during April and May - which is normal as spring turns into summer - has been very welcome, as for many months the shortage of property was actually hampering the market functioning; while our clients enjoyed the selling side of the transaction the challenge to find another house to move to was causing a great deal of restlessness.

“Whatever way the Referendum result goes, people will still need to move,” Richard concludes. “We are fortunate to live in an area where external demand to get in will always outstrip the number of people who choose to leave. We can’t see that dynamic changing whatever the weather.”