UK Housing Is Already Bearing The Brunt Of The Impending Brexit
The impact of Britain's decision to exit the European Union (EU) has begun to show on the UK housing market. According to a survey by the Royal Institution of Chartered Surveyors (RICS) , this adverse scenario is beginning to show its effect in the property markets of the country, data for July show. The UK voted in favour Brexit on June 23.
According to the London-based RICS, “Britain's vote to leave the European Union has undermined confidence among UK consumers and increased worries about their finances and property values. That's curbing demand for housing, though a worsening supply picture is proving some support to prices". It has to be noted that the UK Treasury had predicted that the country's decision to quit the EU would result in home values decline by as much as 18 per cent than if the country decided to stay within the union.
Despite the Bank of England slashing interest rates to a new record low and pumping in a $222-billion stimulus package into the financial system, there are fears of property markets performing weakly in future, too. A change in tax norms that saw buyers flocking to the markets in the first quarter to avoid paying higher levies is also cited as a reason for the lacklustre performance of the sector.
As buyers and investors are in a wait-and-watch mode to sense the likely impact of Brexit, housing transactions are likely to suffer in the near term, according to market analysts. This only goes on to prove why any uncertainty may take a huge toll on the health of the sector. What would be the long-term impact of this on the housing markets, however, has yet to be seen. Several government reports indicate towards a rough patch for business services growth and consumer spending in the year ahead. Many analysts, on the other hand, have termed the weak performance of property markets as “over-reaction” or “knee-jerk reaction”, and predict things to improve in future.
For regular updates on real estate, click here