Brexit uncertainty continues to impact UK housing sentiment

Weak economic outlook and continued uncertainty about the impact of leaving the EU continue to drive negative consumer sentiment about the housing market for a 4th consecutive quarter across Britain.

According to research carried out every quarter since June 2008, 2,000 consumers are asked a range of questions including whether now is a good time to buy a property or not. The index turned negative for the first time since the financial crisis in June 2017 and has remained negative in September, December and now March 2018. It shows that more people are negative than positive about buying a new home.

The survey also asks consumers to identify the more practical barriers that are holding them back from buying. Since December 2008 the single biggest barrier has consistently been the challenge of raising a deposit. Since March 2016 this has been a barrier identified by 60% or more of consumers, in March 2018 68% of consumers identify raising a deposit as their biggest barrier to home ownership.

The survey also tracks whether the requirement to pay Stamp Duty is a barrier. The results give an indication that either first time buyers are unaware of the exemption from stamp duty for many of them in November 2017; do not see the benefit of it as the Government had hoped; or more probably, that after the publicity the change received after the Budget it is no longer at the forefront of consumer’s minds. Whatever the reason it is not considered to be a substantial barrier by consumers.

Paul Broadhead, Head of Mortgage Policy at the BSA, commented on the findings: “The UK is experiencing period of uncertainty and this is having an adverse effect on consumer sentiment and behaviour in the housing market. The concerns that consumers have are clear from a housing index that has remained negative for four quarters. How consumers are behaving can in part be demonstrated by the 6-year high in re-mortgage lending reported by the Bank of England for January 2018¹ and February figures from RICS² which showed listings and new buyer enquiries drifting lower in some regions, particularly London and the South East.

Whilst housing market activity is likely to remain muted for the remainder of 2018 there is good news for would-be home buyers as house prices start to cool in some places across the country. Mortgage finance remains readily available and fierce competition amongst lenders is good for consumers. If the Bank Rate rises as anticipated by a further 0.25% in May, it will still remain historically low.”

source http://blog.evolutionproperties.co.uk/2018/03/29/brexit-uncertainty-continues-to-impact-uk-housing-sentiment/