Brexit Woes Hit Housing Market Early 2019

The Royal Institute of Chartered Surveyors (RICS) released its UK Residential Market Survey yesterday.  This is a survey of Chartered Surveyors across the UK on their outlook for the UK property market in the coming year.

The report highlights continued nerves in the housing market due to Brexit concerns with demand and expected purchase completions falling but prices should to continue rise slowly due to a lack of supply of property on the market.  That said, RICS members suggest that the first 3 months of 2019 in the run-up to Brexit and the UK leaving the EU officially on the 29^th March at 11pm (GMT).

The report found that:

• Number of buyers in November 2018 compared to November 2017 was down -21%, worsening from the -15% in the year to October.
• Number of properties up for sale in November 2018 compared to the previous year is -24% down.  That’s the biggest slowdown in over 2 years.
• Number of property purchase completions was down -15% in November compared to October -10% and is expected to fall further to -23% in the coming months.
• The average estate agent has just 42.1 homes for sale.

The rentals market is steady given that the number of properties for sale is falling, more people are either being forced to stay renting or are holding fire and not buying just yet.

Simon Rubinsohn, RICS Chief Economist said: "It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market. Indeed, I can't recall a previous survey when a single issue has been highlighted by quite so many contributors.  Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line.“

Comment

It is understandable with political and economic risk that the market is slowing and until Brexit has a more stable and known end, we cannot see this changing.  That said, wages are increasing at their highest level for a number of years so we expect both property prices and rents to increase.