Buyer demand hit a three-year low in the run-up to the EU referendum, and agents are predicting tough times ahead.
The NAEA’s May Housing Market report revealed that an average of 304 house hunters registered per member branch in May, down 6% from April, and the lowest recorded since November 2013 when 292 buyers were registered per branch.
On an annual basis demand has fallen 21% since May 2015.
This has at least boosted supply with 37 properties available per branch in May, up from 35 in April.
Meanwhile, the number of sales agreed in May decreased to an average of eight per branch, a drop from nine in April and falling to the same level seen during the seasonal slowdown in January.
First-time buyers seem to be bucking the trend, though, as other reports have suggested.
Although the number of house hunters registered per branch and sales agreed fell in May, sales to first-time buyers increased marginally, accounting for 27% of the total sales completed last month, up one percentage point from April.
With a Brexit now looming, two in five agents are predicting that house prices will fall and 30% expect a decrease in demand.
Mark Hayward, managing director of the NAEA, said: “The EU referendum without doubt meant that May was a month of uncertainty for potential house buyers – demand dropped significantly and is currently at the lowest level we have seen in the last three years.
“As a result of the vote for a Brexit, we expect international investors to look a lot harder at the UK as a potential market to buy in and this will have a knock-on effect on the house building sector, as investments may be delayed or put off completely.
“Although in the short term we believe that house prices will remain stable, we cannot be certain about the next quarter as political uncertainty and market unrest could affect the housing market.”
Hayward warned that the Leave vote could exacerbate the skills shortage and lack of homes being built as there will be less migrant labour, adding: “This means that in the longer term, something will need to give which regrettably could mean a surge in house prices or buyers struggling to find a suitable property in order to move or get that first foot on the ladder.”
Comments (3)
Phones in are quieter. Buyers are keeping their heads down True.
But for how long?
We are always quieter during an election and a referendum clearly even more so. But after an election the phones start to ring again and I expect the same again. The only difference is if buyers keep life on hold till after the summer holidays will we need to wait any longer.
Next: stock markets are up, sterling up a bit too doesn’t this suggest life is actually going on despite the wrong EU outcome?
Two points on this. Firstly the NAEA only have about 6 people filing these figures so be careful reading too much into them.
Secondly we have actually seen an uplift in activity since the vote. We are very surprised but pleased with only two fall throughs and more sales agreed than lost
Stable prices but not a lot on the market.
Two agents local to me are making plans already, one is selling his rental properties to fund his agency and another has sold a big % of his business for a cash injection.
Hold on to your hat folks, we could be in for a rocky ride.