Brexit still unlikely to affect sales numbers, but could hit prices

 
Brexit still unlikely to affect sales numbers, but could hit prices [Photo: iStock/jmiks]

The UK's decision to leave the European Union (EU), and the political uncertainty that this will bring about until the move is finalised will affect property prices across the UK, but is not likely to damage demand, keeping sales numbers up. 

According to the new Halifax Housing Market Confidence Tracker, there has been a real drop in confidence in house prices across the country in recent months, taking the reading to one of its lowest levels for years. But curiously, while many expect prices to fall, they don't think demand will. 

Halifax said that the 14 point fall in house price confidence recorded in its survey is the sharpest single drop it has recorded since it started tracking confidence levels, while optimism has now also fallen to its lowest level nationwide since June 2013. 

Although confidence is low, however, a majority of 57 per cent of those surveyed are still expecting to see property prices in the UK settle at a higher level next year than they are currently at. This is compared to 15 per cent who are anticipating a fall in the same period. 

And while this is a lower confidence reading than the market has become accustomed to, it's worth noting that purchasing intentions remain high, which makes it unlikely that there will be a fall in the number of sales moving forward. 

Of those who said they were thinking about buying or selling a home before June's EU referendum, only a small number (15 per cent) have said they have since changed their mind. 

"This sentiment is consistent with recent findings from the Halifax house price index which show that prices are still growing, but to a lesser extent. Confidence with the wider economy has tracked down sharply since May 2015 but encouragingly, optimism has bounced back to where it was a year ago and is broadly neutral," said Martin Ellis, Halifax housing economist.