Property Market Stakeholder Sentiment Slumps In August
The majority of stakeholders in the property market feel despondent about the near future of the sector.
The uncertainty caused by Brexit is leading to reduced public confidence in the property market, deterring many from buying and selling property until the Brexit storm passes.
According to the RICS Residential Market Survey report for August, the net balance for newly agreed sales in the current market declined from -6% in July to -8% in August, indicating that fewer buyers and/or sellers are looking to complete transactions in the current political climate. When dis-aggregated, most regions in the UK posted flat of negative sales trends for August.
Speculating into the sales expectations over the next three months, respondents perceive a weakening market as the negative net balance slipped from -6% in July to -23% in August. This figure and fall represented the sharpest decline and poorest return since February when respondents were worried about the impact of the original Brexit deadline in March.
Although the index suggests that +5% of respondents feel as though the market will stabilise over the next 12 months, this figure has plummeted from +22% in June and halved the +12% of positive sentiment witnessed in July.
Whilst the buyer demand index remains positive with a +3% measured in August, this has fallen from +8% in July and 10% in June. Although buyers are still perceived to be looking for properties, the slow decline suggests a reduced confidence that this trend will remain positive in the near future.
Similarly, a recent survey into the housing market found public sentiment and confidence falling significantly. The ‘Property Tracker Survey,’ conducted by the Building Societies Association, found that, of the 2,000 respondents, the index sentiment had fallen to minus 12 from minus 5 in June and +42 at its peak in 2009.
The index has now been in negative territory since the +5 polled in March 2016, months prior to the referendum with people viewing the current market as a bad time to buy and sell property.
Simon Rubinsohn, RICS Chief Economist, said:
“It is hard to get away from the shadow being cast over the housing market by the seemingly never-ending Brexit saga. Indeed, uncertainty is a theme that respondents continue to highlight as a negative influence on sentiment in survey after survey. That said, the key RICS activity indicators have actually remained relatively resilient until now pointing to only a modest dip in transactions across the country rather than anything more severe.
Paul Broadhead, BSA Head of Mortgages & Housing comments:
“With the level of political uncertainty the country is experiencing, it is unsurprising that consumer confidence in the housing market, amongst other things has taken a knock. In the coming weeks and months, as we find out what shape Brexit will take, we are hopeful that confidence and stability will begin to return.
“We will be monitoring closely the barriers to homeownership. It is positive that raising a deposit has become a slightly lesser concern to would-be homeowners, but with the Help to Buy ISA scheme drawing to a close from November this could easily change. Some are turning to a Lifetime ISA (LISA) which follows a similar structure to the Help to Buy ISA. Currently 3 of the 4 cash LISA providers are building societies.
“Aspiring homeowners are encouraged to speak to their local building society to find out their best options, and how to make the most of their savings when raising a deposit for that all-important property purchase.”
Is Brexit impacting on the conveyancing sector? Is the property market going to struggle over the next three months?