Demand for homes in UK falls to three year low, according to estate agents

Taylor Scott International News

Uncertainty created by the UK’s decision to leave the European Union has triggered demand for property to fall to the lowest level seen in three years, according to a new report. The number of house sales agreed in May dropped in the run up to the referendum and the majority of estate agents believe that demand will fall further in the short term, according to the latest housing report from the National Association of Estate Agents (NAEA). Estate agents recorded an average of 304 house hunters registered per member branch in May, as uncertainty in the lead up to the referendum stalled buyers. This was down 6% from April, and the lowest recorded since November 2013 when 292 buyers were registered per branch. The data also shows that compared to May 2015 when 383 house hunters were recorded, demand has decreased by 21% year on year. In line with falling demand in May, the supply of houses available to buyers increased marginally from 35 properties available to buy per branch in April to 37 in May. The number of sales agreed in May decreased to an average of eight per branch, a drop from nine in April falling to the same level seen during the seasonal slowdown in January. In May some 41% of agents predicted that house prices will fall and 30% expect demand will also decrease as a result of a the referendum result. Although the number of house hunters registered per branch and sales agreed fell in May, sales to first time buyers increased marginally. Some 27% of the total sales completed last month were to first time buyers, an increase of one percentage point from April. ‘The EU referendum without doubt meant that May was a month of uncertainty for potential house buyers and demand dropped significantly and is currently at the lowest level we have seen in the last three years,’ said Mark Hayward, NAEA managing director. ‘As a result of the vote for a Brexit, we expect international investors to look a lot harder at the UK as a potential market to buy in and this will have a knock on effect on the house building sector, as investments may be delayed or put off completely,’ he pointed out. ‘Although in the short term, we believe that house prices will remain stable, we cannot be certain about the next quarter as political uncertainty and market unrest could affect the housing market,’ he explained. He also pointed out that the supply of available housing is still extremely low compared to this time last year, which is particularly worrying. ‘As we continue to say, there are simply not a sufficient number of homes available in this country to cater for everyone’s needs and a Brexit could impact the skills required to drive property developments in the UK,’ said Hayward. ‘This means that… Taylor Scott International

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