With all the news and speculation surrounding the EU referendum, due to take place in less than two weeks, it is perhaps no big surprise to learn that news relating to house prices has largely been overlooked. To date, house prices haven’t dropped. However, they are showing signs of slowing down compared to where they have been in the past.
The Royal Institute of Chartered Surveyors (RICS) has revealed its members have less confidence in the housing market than they had previously. However, with that said, it would appear that price increases are slowing down as opposed to dropping – at least at present.
A natural progression?
The question is why this slowdown is occurring. In reality, many experts believe the rush to purchase buy-to-let properties before the stamp duty rules changed heated up the market temporarily at the start of the year. Now those laws have come into force, fewer houses are being bought with buy-to-let mortgages. This means the housing market as a whole will see the effects of that slowdown.
Fewer sales and fewer properties on the market
Many surveyors who took part in the research for RICS said they had made fewer sales in recent months. They also pointed out fewer properties being put up for sale. These are both indications that people are not as keen to move at the moment as they have been in the past.
At the moment, house prices are settling rather than falling. However, it may not remain this way for long. It is thought that prices will indeed dip below current levels.
However, the news is not all bad. According to the experts, it is thought the dip may only be for the short term. The overall picture is one of stability – although it remains to be seen whether this will continue to be the case once the EU referendum result is known.
And for the long term?
The result of the referendum will have some kind of effect on mortgage rates and house prices. However, in reality, the effects will not be known until after the event – whichever way things go.
Additionally, it is thought that regardless of the result, the long-term picture will still be one of relative stability. Indeed, house prices look set to rise over the long term. The one exception to the rule could be with properties in London. Many property sales are made to foreigners in the city, and if the UK does vote for Brexit, these individuals may be unable to continue buying as they have before.
A lot remains to be seen, and in the end, the forecast from RICS is just that – a forecast. However, they are known to be quite accurate for the most part. All of which means we must wait and see what the immediate effects are and whether house prices will fall this year – and how long such a fall might last. We shall keep you informed either way.