Brexit, Bad News and Weather Take Blame for U.K. Housing Woes
(Bloomberg) -- U.K. house prices stagnated in August as brokers blamed Brexit fears, warm weather and unhelpful headlines for a lack of activity, according to the Royal Institution of Chartered Surveyors.
The organization’s gauge indicated prices barely rose last month, it said in a report Thursday, driven by weakness in London and the southeast. New enquiries slid as the Bank of England’s latest interest-rate increase boosted caution, RICS said.
The U.K. housing market has been weakening after a three-decade bull run fanned by a shortage of properties in the country. London, at the vanguard of the boom, is now bearing the brunt of concerns over the economic and political outlook.
Here’s a roundup of reasons suggested by brokers for the stagnation in August:
Brexit is putting off buyers and also hitting the capital’s rental sector, the survey showed.
Simon Barker, of Knight Frank LLP in Sherborne, south west England, says that Brexit, and other political issues in Britain, “still makes buyers cautious and there is no idea how long this will last,” while Jeremy Epton of Youhome in London suggests that “vendors continue to ignore uncertainty created by Brexit in valuing their own asset.”
Meanwhile, in London’s lettings sector “the corporate-funded relocation of tenants from mainland Europe has been subdued for obvious reasons,” according to William Delaney of Lawrence Ward & Co.
Some brokers blamed unhelpful headlines about Brexit and the weakness of the housing market for deterring buyers.
The “media’s Brexit speculation causing people to defer decision to move,” says Stephen Wolfenden of the The County Homesearch Company in Oxford, while James Gubbins of Dauntons, London suggests that “media reports of a declining London market have put buyers on edge as to whether now is the right time to buy.”
The U.K.’s summer heatwave also drew the ire of brokers, who suggested it further worsened the traditionally quiet month.
“Estate agents are good at finding excuses but during the recent extreme hot weather, enquiry levels and therefore sales slowed considerably,” says Allan Fuller, of Allan Fuller Estate Agents, London. Michael Brooker, an estate agent in East Sussex, said that “hot weather and August led to a dull market.”
The government’s property tax changes, a perennial bugbear of brokers, also drew criticism.
The “market remains subdued across almost all capital tiers of the market. This situation is unlikely to change unless some of the punitive transactional taxes are rescinded,” said James Perris of De Villiers Chartered Surveyors in London.
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