Brexit Could Lead to Fall in Housing Transactions

Housing transactions could go down by 10% if the UK votes in favour of leaving the European Union, according to Hometrack’s latest opinion.

The report suggests that the current level of growth in house prices is just over 10% in the city, in comparison to 6.6% a year ago before the General Election.

Transactions have seen a surge recently before the changes to stamp duty, resulting in many cities noting a monthly house price growth spike.

For instance Cambridge posted an increase of 15.8%, with the only UK city to buck the rising trend being Aberdeen which posted a 6.1% downturn.

Hometrack, however, argues that should a ‘Brexit’ vote be successful at the upcoming EU referendum, we could see a reduction of 5% to 10% in housing transactions, with London experiencing a particularly negative impact.

In contrast, by choosing to stay in the EU, Hometrack insists that market confidence would receive a boost.

It anticipates that large regional cities like Birmingham, Leeds and Manchester benefiting most, as these are cities with growing demand for housing and the current house price growth rates would likely be maintained.

In addition, Hometrack said that in the ten year period prior to 2007, volumes of sales went down four times in London, by up to 15%, thus showing the city’s proneness of being impacted by external factors, particularly following swift price appreciation periods.

Hometrack Insight Director, Richard Donnell, said that the housing market’s future will be dictated by whether the UK votes to stay in or leave the EU .

Mr Donnell added that their analysis of the housing market’s response to external factors across the last two decades shows that a leave vote may mean a 5% to 10% decrease in housing turnover and the city that would suffer the most would be London.


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BDC 317 : Jun 2024