By Bea Patel, TLE Property Editor and Director of Shop for an Agent
As we approach the EU referendum vote on 23 June 2016, property activity has dampened as many buyers and sellers wait for the outcome of the vote.
In London, the average property price declined 0.2 per cent on the month and has increased by only 5.1 per cent on the year. This compares to annual house price growth of 9.8 per cent in April.
There has been a sharp fall in demand for properties in London, down 5.6 per cent on the month and 11.9 per cent on the year. The number of properties for sale has fallen 2.7 per cent on the month, but has risen 2 per cent annually. Sales transactions are down 7.4 per cent on the month but have increased 4.5 per cent on the year.
The below diagram shows house price changes across London in May 2016:
With differing views on the effects of Brexit on the property industry, Paul Smith, ceo of haart estate agent, said: “The upcoming EU referendum is causing high levels of short-term uncertainty in the property market, making both buyers and sellers nervous, resulting in a fall in activity. New buyer demand for example, declined 5 per cent on the month in May across the UK and 6 per cent in London. This is in turn leading to a slowdown in house price growth. London has been impacted most by the fall in investment activity with new buyer demand down 5.6 per cent on the month, resulting in a 0.2 per cent fall in house prices on the month in May.
“Whether we remain in the EU or not, the UK, particularly London will not falter as a safe haven for investment. It is the uncertainty around our status in the EU that is causing the market to stagnate, once we know the outcome, regardless of what it is, the property market will become reinvigorated. In the long term, house prices will bounce back once more as the age-old problem of a disparity between the amount of stock available and the number of buyers competing, rears its head.”