As the UK Government triggers the formal process for exiting the European Union today, a new survey has shed light on exactly how the prospect of Brexit has affected the property market, says Show House.
According to the annual Homeowner survey conducted by YouGov for HomeOwners Alliance and BLP Insurance, more than 1 million UK adults have shelved plans to purchase a new property because of the vote to leave the European Union.
When Brexit became reality: British pound and property after March 29
The referendum result is just one of a number of factors leading increasing numbers of British homeowners to stay put rather than move property. The research found that over 7.5 million UK adults have put off plans to move this this year.
In addition to the perennial challenges around rising house prices (26%), increasing cost of living (25%) and difficulty securing a mortgage or re-mortgaging (25%), almost one in six (15%) of those who stated that they had put plans to move on hold said that the Brexit vote was behind their decision. Those in the North East (27%) and Northern Ireland (21%) were the most likely to have cancelled plans to move.
The key findings of the research were as follows:
- On balance, UK adults say they have become less likely to buy or move in the past 12 months (with 9% of UK adults saying they are more likely to buy/move and 15% saying they are less likely to do so; net -6%).
- On balance, aspiring homeowners say they have become less likely to buy or move in the past 12 months. 14% of aspiring homeowners say they have become more likely to buy/ move in the past 12 months, while 17% say they are less likely to do so (net -2%).
- Regionally, those in the North East (-21%), Northern Ireland (-18%), Yorkshire & Humber (-11%) and Wales (-9%) have a greater balance of people saying they have become less likely to buy/ move in the past year.
- Top reasons for putting off buying/moving plans include: rising house prices (26%); rising cost of living (25%); difficulty in getting a mortgage/re-mortgaging (25%); a change in needs (24%); and the economic outlook for jobs and pay (21%).
Paula Higgins, Chief Executive of the HomeOwners Alliance said, “Our research demonstrates that both first-time buyers and those who already own a home are choosing to play it safe in these uncertain times. With the government preparing to trigger Article 50 this week, we can expect further uncertainty in the market until the UK’s future relationship with Europe is more clearly defined. People putting off plans to buy or sell chokes housing supply and generates pent up demand. The housing market needs certainty in order to be able to function most efficiently.”
“The government could help to ameliorate the situation, by looking again at stamp duty. It remains stubbornly high and acts as a drag on the market. Reducing the burden for genuine owner-occupiers could really help to keep the market moving in these uncertain times.”
Kim Vernau, Chief Executive Officer of BLP Insurance added, “We’re at a critical juncture for the UK property industry as we await further clarity around the terms of the UK’s exit from EU. Purchasing a new home is one of the biggest decisions that an individual is ever likely to undertake, and this is only compounded by the fact that average house prices are continuing on their upward trajectory. It’s therefore not surprising that many people are putting their housing ambitions on hold amidst the prevailing uncertainty.”
