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Brexit causes minimal impact on house price summer slowdown

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  • 18/07/2016
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Brexit causes minimal impact on house price summer slowdown
The holiday season drag on property prices was slightly stronger than the typical July slowdown as political turbulence unsettled the market in the two weeks following the UK’s vote to leave the EU.

Rightmove’s House Price Index, covering the two weeks before and two weeks after the referendum recorded a 0.9%, or £2,647, fall in house prices in July. Buyer demand in the two weeks since the referendum remained consistent compared to the same period in 2014, although demand was down on 2015.

Last year’s figures were boosted by pent-up demand being released into the market after the result of the general election, creating a distorted view of the level of buyer enquiries for the months of June and July, which had surged by 25% compared to the same two months in 2014.

Looking at the two weeks after the Brexit vote, buyer demand fell by 16% compared to 2015 but was consistent with the number of enquiries received by agents for the same period in 2014.

Rightmove director and housing market analyst Miles Shipside said the figures gave an ‘early but reassuring view’ into the short-term effect of the political turmoil straddling the 23 June with many estate agents reporting that business was now returning to the previous norm following the ‘surprise result’.

“As far as the price of property coming to market is concerned, the fall of 0.9% is within the range that we have seen at this time of year since 2010. With the onset of the summer holiday season, new sellers typically price more conservatively and the average drop in the month of July is 0.4% over the last six years.

“Perhaps unsurprisingly this July’s fall is marginally larger, as political turbulence has a track record of unsettling sentiment. Indeed last year saw a seasonally unusual 0.1% fall in the run up to the May election, and a June and July price surge as a result of the post-election boost. Average new seller asking prices were up by 3.1% over that two-month period.”

Sellers are still coming to market, with new property instruction numbers now slightly ahead of the same weeks in 2015. Compared to the same period last year, the two weeks before the Brexit vote saw the number of properties coming to market down by 8%, though the two weeks afterwards have now seen the levels up by 6%.

Mark Manning, director of Manning Stainton in Leeds, Harrogate, Wetherby and Wakefield, said demand and the availability of homes to buy looked healthy in the north. New listings in June increased by 7% on the previous year and the volume of sales remained at a similar level to the previous months. “The barrage of fall throughs in the wake of our vote never came and instead a healthy number of completions remained which was a welcome relief,” he added.

Kevin Shaw, Leaders Estate Agents national sales director, said his firm had seen no significant changes across its 120 branch network with the number of sales agreed, exchanges and new instructions all at similar levels to the previous few months. The predicted increase in the number of sales falling had also not materialised.

“While we have seen a small number of buyers attempting to renegotiate the price they are paying for a property, these requests have almost all been rejected and the sale has progressed as planned, showing that Brexit has had little impact on buyers and sellers, and their desire to move,” he said.

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