RICS survey confirms steep fall in buyer enquiries in south east post-Brexit vote
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The housing market is suffering a marked drop in activity following the EU Referendum result, according to a new survey by the Royal Institute of Chartered Surveyors (RICS).
The UK Residential Market Survey for June 2016 showed buyer demand fell at the fastest rate since 2008 after Britain voted for Brexit.
Price growth has continued to moderate in the wake of the Referendum, with new buyer enquiries dropping country-wide – and ours has been one of the hardest hit areas.
48 per cent of surveyors in the south east reported a fall in enquiries, and uncertainty linked to the result of the Referendum is considered the key reason for this.
A shortage of supply has also been an issue, with 45 per cent of respondents nationally reporting a decline in instructions – the steepest fall since records began in 1998.
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Amid this economic and political uncertainty, buyer confidence has fallen, which has caused price growth to moderate significantly.
The RICS reports that price expectations are now in negative territory across all parts of the UK.
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The outlook for price growth has softened, while expectations for near-term rental growth have also dipped a little.
Expectations for price growth have also softened in the medium term, with contributors predicting growth of 19 per cent over the next five years, down from 22 per cent in May.
Simon Rubinsohn, RICS Chief Economist, commented, “Big events such as elections typically do unsettle markets so it is no surprise that the EU Referendum has been associated with a downturn in activity.
“However even without the build up to the vote and subsequent decision in favour of Brexit, it is likely that the housing numbers would have slowed during the second quarter of the year following the rush in many parts of the country from buy-to-let investors to secure purchases ahead of the tax changes.
“RICS data does suggest that the dip in activity will persist over the coming months, but the critical influence looking further ahead is how the economy performs in the wake of the uncertainty triggered by the vote to leave.
“Respondents to the survey are understandably cautious but with interest rates heading lower and sterling significantly so, it remains to be seen whether the concerns about a possible stalling in both corporate investment and recruitment are justified.’’